Periodic System
Calculate Cost of Goods Sold, Ending Inventory, gross profit and gross profit rate. Using FIFO, LIFO and Average costs.
You are provided with the following information for Danielle Inc. for the month ended June 30, 2005. Danielle uses the periodic method for inventory.
| date |
description |
quantity |
unit cost or selling price |
june1
june4
june10
june11
june18
june18
june25
june28 |
beginning inventory
purchase
sale
sale return
purchase
purchase return
sale
purchase |
25
85
70
10
35
5
50
20 |
$60
64
90
90
68
68
95
72 |
Instruction:
a. calculate (i) ending inventory, (ii) cost of goods sold, (iii) gross profit, (iv) gross profit rate under each of the following methods
1. LIFO
2. FIFO
3. Average cost
b. compare results for the three cost flow assumptions