During the year, Trombley Incorporated has the following inventory transactions.

For the entire year, the company sells 81 units of inventory for $30 each.

Required:

1. Using FIFO, calculate

(a) Ending inventory,

(b) Cost of goods sold,

(c) Sales revenue,

(d) gross profit.

2. Using LIFO, calculate

(a) Ending inventory,

(b) Cost of goods sold,

(c) Sales revenue,

(d) gross profit.

3. Using weighted-average cost, calculate

(a) Ending inventory,

(b) Cost of goods sold,

(c) Sales revenue, 

(d) Gross profit.

4. Determine which method will result in higher profitability when inventory costs are declining.

Transcribed Image Text:

Date Transaction Number of Units Unit Cost Total Cost Jan. 1 Beginning inventory 20 $22 $ 440 Mar. 4 Purchase 25 21 525 Jun. 9 Purchase 30 20 600 Nov. 11 Purchase 30 18 540 105 $2,105