Assume a Bear Sports outlet store began January 2014 with 42 pairs of running shoes that cost the store $36 each. The sale price of these shoes was $68. During January, the store completed these inventory transactions:

		Units	Unit Cost	Unit Sale Price
Jan 3	Sale .............	15	$36	$68
8	Purchase......	82	38
11	Sale .............	27	36	68
19	Sale .............	6	38	70
24	Sale .............	29	38	70
30	Purchase......	25	40

Requirements

1. The preceding data are taken from the store’s perpetual inventory records. Which cost method does the store use? Explain how you arrived at your answer.

2. Determine the store’s cost of goods sold for January. Also, compute gross profit for January.

3. What is the cost of the store’s January 31 inventory of running shoes?

Answer rating: 100% (QA)

The First In First out cost methodFIFO used in this case because all inventory first out which ... View the full answer