Selbe Inc. is a retailer using the perpetual inventory method. All sales returns from customers result in the goods being returned to inventory. (Assume that 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 Selbe Inc. for the month of January.
| Date |
Description |
Quantity |
Unit Cost or
Selling Price |
| Dec. |
31 |
Ending inventory |
164 |
$21 |
| Jan. |
2 |
Purchase |
98 |
23 |
| Jan. |
6 |
Sale |
182 |
40 |
| Jan. |
9 |
Sale return |
8 |
40 |
| Jan. |
9 |
Purchase |
71 |
28 |
| Jan. |
10 |
Purchase return |
17 |
28 |
| Jan. |
10 |
Sale |
50 |
50 |
| Jan. |
23 |
Purchase |
106 |
28 |
| Jan. |
30 |
Sale |
127 |
50 |
Using FIFO method, calculate (i) cost of goods sold, (ii) ending inventory, and (iii) gross profit. (Assume sales returns had a cost of $21 and purchase returns had a cost of $28.)