Refer to the data for Cycle Guys in E5-31B.

Requirements 1. Compute the cost of goods sold under FIFO.

2. Compute the cost of goods sold under LIFO.

3. Which method results in a higher cost of goods sold?

5-31

Assume that Cycle Guys bought and sold a line of mountain bikes during December as follows:

Cycle Guys uses the perpetual inventory system.

Transcribed Image Text:

Date Item Quantity Unit Cost Dec 1 5 Sale 12 Purchase 21 Sale Balance 12 $225 6 10 $220 8 30 Sale 6