Assume that a Firestone Tire Store completed the following perpetual inventory transactions for a line of tires.

Question:

Beginning Inventory ........ 34 tires @ $ 82

Purchase ......... 25 tires @ $88

Sale .............. 40 tires @$134

Requirements

1. Compute cost of goods sold and gross profit under FIFO.

2. Compute cost of goods sold and gross profit using average cost. Round average cost per unit to the nearest cent and all other amounts to the nearest dollar.

3. Which method results in the larger gross profit and why?

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Financial Accounting

ISBN: 978-0132889711

1st Canadian Edition

Authors: Jeffrey Waybright, Liang Hsuan Chen, Rhonda Pyper

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Question Posted: Jul 08, 2015 02:28 AM

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Assume that a Firestone Tire Store completed the following perpetual inventory transactions for a line of tires.

Question:

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Req 1 FIFO Sales Revenue 40 134 5360 Cost of Goods Sold 34 82 6 88 3316 G...View the full answer

Financial Accounting

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