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19E_2

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Horngren'S Financial And Managerial Accounting
Found in: Page 363

Short Answer

Question: Assume that Toys Galore store bought and sold a line of dolls during December as follows:

Dec. 1 Beginning merchandise inventory 13 units @ $ 9 each

8 Sale 8 units @ $ 22 each

14 Purchase 16 units @ $ 14 each

21 Sale 14 units @ $ 22 each

Requirements

2. Compute the cost of goods sold, cost of ending merchandise inventory, and grossprofit using the LIFO inventory costing method.

Cost of goods sold:$372

Ending Inventory:$73

Gross Profit:$112

See the step by step solution

Step by Step Solution

Step-by-Step-SolutionStep1: Perpetual Inventory Record using FIFO

Date

Purchase/opening

Sales

Balance

Units

Cost per unit

Amount

Units

Cost per unit

Amount

Units

Cost per unit

Amount

Dec 1

13

$9

$117

13

$9

$117

8

8

$22

$176

5

$9

$45

14

16

$14

$224

5

16

$9

$14

$269

21

14

$14

$196

5

2

$9

$14

$73

Total

29

$341

22

$372

7

$9

$14

$73

Step 2: Computation of gross profit

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