Assume an outlet of The Runner's Store began August 2017 with 40 pairs of running shoes that cost the store $40 each. The sale price of these shoes was $70. During August, the store completed these inventory transactions:

Requirement
1. Determine the store's cost of goods sold, gross profit, and ending inventory using (a) FIFO and (b) weighted-average assuming the perpetual system is used.
2. How would your answer change under (a) FIFO and (b) weighted-average cost if the periodic system was used?
3. How do you determine which inventory system to use: perpetual or periodic?

Transcribed Image Text:

ce 16 80 24 9 30 18 Aug. 3 Sale $70 8 Purchase 11 Sale 19 Sale 24 Sale 30 Purchase 41 70 72 72 42