Assume that Toyland store bought and sold a line of dolls during December as follows:
Dec. 1Beginning merchandise inventory... 11 units @ $ 8 each
8 Sale................... 6 units @ $ 21 each
14 Purchase............... 17 units @$15 each
21 Sale...................15 units @ $ 21 each
Requirements
1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method.
2. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method.
3. Which method results in a higher cost of goods sold?
4. Which method results in a higher cost of ending merchandise inventory?
5. Which method results in a higher gross profit?