Suppose a Sam's Club store in Champaign, Illinois, ended January 2016 with 800,000 units of merchandise that cost $5.00 each. Suppose the store then sold 100,000 units for $510,000 during February. Further, assume the store made two large purchases during February as follows:

Requirements
1. Calculate the store's gross profit under FIFO and LIFO at February 29.
2. What caused the FIFO and LIFO gross profit figures to differ?

Transcribed Image Text:

Feb 5 45,000 units@ $3.10 $139,500 28 40,000 units @ $2.20$88,000