Response to the following :
Using the information contained in problem 1, calculate the value of the year-end inventories using FIFO and LIFO. Also, prepare profit and loss accounts showing the gross profit under each of the valuation methods for all three years.
Problem 1:
Marcus Co. has been in operation for three years. The purchases and sales information in Table 10.15 represents the company's activities for its first three years:
Table: Sale/purchase transactions for Marcus Co.
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2005
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2006
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2007
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Sales (unit)
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12,000 @ €50
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20,000 @ €60
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18,000 @ €65
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Purchases (units)
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4,000 @ €20
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8,000 @ €35
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7,000 @ €40
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|
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7,000 @ €20
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4,000 @ €30
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5.000 @ €35
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|
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8.000 @ €30
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1,000@ €40
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8,000 @ €25
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Prepare a schedule illustrating the number of units held at the end of each of the three years shown.