You are the vice president of finance of Sandy Alomar Corporation, a retail company that prepared two different schedules of gross margin for the first quarter ended March 31, 2020. These schedules appear below.

The computation of cost of goods sold in each schedule is based on the following data.

Jane Torville, the president of the corporation, cannot understand how two different gross margins can be computed from the same set of data. As the vice president of finance, you have explained to Ms. Torville that the two schedules are based on diff erent assumptions concerning the flow of inventory costs, i.e., FIFO and LIFO. Schedules 1 and 2 were not necessarily prepared in this sequence of cost flow assumptions.

Instructions

Prepare two separate schedules computing cost of goods sold and supporting schedules showing the composition of the ending inventory under both cost fl ow assumptions.

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Sales ($5 per unit) Gross Cost of Goods Sold Margin Schedule 1 Schedule 2 $150,000 $124,900 $25,100 20,600 150,000 129,400 Cost per Unit Total Cost Units Beginning inventory, January 1 Purchase, January 10 Purchase, January 30 Purchase, February 11 Purchase, March 17 10,000 $4.00 4.20 4.25 4.30 4.40 $40,000 33,600 8,000 6,000 9,000 11,000 25,500 38,700 48,400