Dugan Sales had the following transactions for jackets in 2013, its first year of operations:
Jan 20 Purchased 80 units @ 15 = $1200
Apr 21 Purchased 420 units @ 16 = 6,720
July 25 Purchased 250 units @ 20 = 5,000
Sept 19 Purchased 150 Units @22 = 3,300
During the year Dugan Sales sold 830 jackets for $40 each.
a. Compute the amount of ending inventory Dugan would report on the balance sheet, Assuming the following cost flow assumptions:
(1) FIFO (
2) LIFO and
(3) weighted Average
b. Record the above transactions in general journal form and post T-accounts using
(1) FIFO,
(2) LIFO
(3) weighed average.
Use a separate set of journal entries and T- accounts for each method. assume all transactions are cash transactions.
c. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.