Problem: The Devlin Corporation, a diversified distribution company, purchases cartons of canned tennis balls from the Questor Company and markets the balls under the Devlin brand name.Devlin started operations on January 1, 2016. In the table below, Quarter 1 represents the time period from January 1, 2016to March 31, 2016and Quarter 2 represents the time period from April 1, 2016to June 30, 2016. Devlin began operations on January 1, 2016with no inventory. Purchases and sales data for Devlin's first two quarters of business are shown below:
Quarter 1
Sales 23,000 cartons at $50 per carton
Purchases January 9000 cartons at $25
February 10,000 cartons at $30
March 12,000 cartons at $35
Quarter 2
Sales 55,000 at $65 per carton
Purchases April 14,000 cartons at $40
May 16,000 cartons at $45
June 20,000 cartons at $50
1. Calculate the Quarter 2 ending inventories (in dollars) using the LIFO inventory valuation method.
2. Calculate Quarter 2 GROSS PROFIT using the LIFO inventory valuation method
3. Calculate the Quarter 2 ending inventories (in dollars) using the FIFO inventory valuation method.
4. Calculate quarter 2 GROSS PROFIT using FIFO inventory valuation method.