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

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

Connie Miller, 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. Miller that the two schedules are based on different 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 flow assumptions (assume periodicsystem).

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Sales ($15 per unit) $540,000 540,000 Cost of Goods Sold $220,700 227,050 Gross Margin $319,300 312,950 Schedule 1 Schedule 2 Total Cost $60,000 73,200 93,750 19,500 52,800 Cost Units per Unit Beginning inventory, May 1 Purchase, May 2 Purchase, June 5 Purchase, June 18 Purchase, July 7 10,000 12,000 15,000 3,000 8,000 $6.00 6.10 6.25 6.50 6.60