Topanga Group began operations early in 2013. Inventory purchase information for the quarter ended March 31, 2013,

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Topanga Group began operations early in 2013. Inventory purchase information for the quarter ended March 31, 2013, for Topanga’s only product is provided below. The unit costs include the cost of freight. The company uses a periodic inventory system.


Topanga Group began operations early in 2013. Inventory purchase information


Sales for the quarter, all at $7.00 per unit, totaled 20,000 units leaving 14,000 units on hand at the end of the quarter.

Required:
1. Calculate the Topanga’s gross profit ratio for the first quarter using:
a. FIFO
b. LIFO
c. Average cost
2. Comment on the relative effect of each of the three inventory methods on the gross profitratio.

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Related Book For  book-img-for-question

Intermediate accounting

ISBN: 978-0077647094

7th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson

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