Selbe Inc. is a retailer operating in Edmonton, Alberta. Selbe uses the perpetual inventory method. All sales returns from customers result in the goods being returned to inventory. 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 2010.
Unit Cost or
Date Description Quantity Selling Price
December 31 Ending Inventory 245 $31
January 2 Purchase 153 34
January 6 Sale 275 61
January 9 Sale return 15 61
January 9 Purchase 115 37
January 10 Purchase return 23 37
January 10 Sale 76 69
January 23 Purchase 153 40
January 30 Sale 184 76
For each of the following cost flow assumptions, calculate (i) cost of goods sold, (ii) ending inventory, and (iii) gross profit.
(1) LIFO. (Assume sales returns had a cost of $31 and purchase returns had a cost of $37.)
(2) FIFO. (Assume sales returns had a cost of $31 and purchase returns had a cost of $37.)
(3) Moving-average. (For moving average computations, round per unit cost to 3 decimal places, e.g. 12.355.)
LIFO FIFO Moving Average
Cost of goods sold $ $ $
Ending inventory $ $ $
Gross profit $ $ $