Assume that Toys Galore store bought and sold a line of dolls during December as follows:

Requirements
1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method.
2. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method.
3. Which method results in a higher cost of goods sold?
4. Which method results in a higher cost of ending merchandise inventory?
5. Which method results in a higher gross profit?

Transcribed Image Text:

Dec. 1 Beginning merchandise inventory 13 units @ $ 9 each 8 units @ $ 22 each 16 units @ $ 14 each 14 units @ $ 22 each 8 Sale 14 Purchase 21 Sale