Express Lane, Inc., a regional convenience store chain, maintains milk inventory by the gallon. The first month’s milk purchases and sales at its Freeport, FL, location follows:
Nov 2 1 gallon @ $2.00 each
6 2 gallons @ $2.10 each
13 2 gallons @ $2.20 each
14 The store sold 4 gallons of milk to a customer.
Requirement
1. Describe which costs would be sold and which costs would remain in inventory. Then, identify the amount that would be reported in inventory on November 15 using
a. FIFO.
b. LIFO.
c. Average cost.