Donovan, Inc. had the following sales and purchase transactions during Year 2. Beginning inventory consisted of 120 items at $80 each. Donovan uses the FIFO cost flow assumption and keeps perpetual inventory records.

Required
a. Record the inventory transactions in a financial statements model.
b. Calculate the gross margin Donovan would report on the Year 2 income statement.
c. Determine the ending inventory balance Donovan would report on the December 31, Year 2, balance sheet.

Transcribed Image Text:

Description Date Transaction Purchased Sold 100 items @ $90 70 items @ $175 80 items @ $175 50 items @ $95 60 items @ $180 Mar. 5 Аpг. 10 June 19 Sep. 16 Nov. 28 Sold Purchased Sold