Assume a Nike outlet store began August 20X0 with 40 pairs of running shoes that cost the store $40 each. The sale price of these shoes was $70. During August, the store completed these inventory transactions:
|
|
Units
|
Unit Cost
|
Unit Sale Price
|
|
Aug. 3
|
Sale
|
16
|
$40
|
$70
|
|
8
|
Purchase
|
80
|
41
|
|
|
11
|
Sale
|
24
|
40
|
70
|
|
19
|
Sale
|
9
|
41
|
72
|
|
24
|
Sale
|
30
|
41
|
72
|
|
30
|
Purchase
|
18
|
42
|
|
Required
1. The preceding data are taken from the store's perpetual inventory records. Which cost method does the store use? Explain how you arrived at your answer.
2. Determine the store's cost of goods sold for August. Also compute gross profit for August.
3. What is the cost of the store's August 31 inventory of running shoes?