Problem - Mercer Inc. is a retailer operating in British Columbia. Mercer uses the perpetual inventory method. All sales returns from customers result in the goods being returned to inventory; the inventory is not damaged. Assume that there are no credit transactions; all amounts are settled in cash. You are provided with the following information for Mercer Inc. for the month of January 2014.
|
Date
|
Description
|
Quantity
|
Unit Cost or Selling Price
|
|
January 1
|
Beginning inventory
|
100
|
$14
|
|
January 5
|
Purchase
|
140
|
18
|
|
January 8
|
Sale
|
110
|
26
|
|
January 10
|
Sale return
|
10
|
26
|
|
January 15
|
Purchase
|
55
|
19
|
|
January 16
|
Purchase return
|
5
|
19
|
|
January 20
|
Sale
|
90
|
30
|
|
January 25
|
Purchase
|
20
|
21
|
Calculate the Moving-average cost per unit at January 1, 5, 8, 15, 20, & 25.
For each of the following cost flow assumptions, calculate cost of goods sold, ending inventory, and gross profit. (1) LIFO. (2) FIFO. (3) Moving-average cost.