Jefferson Company had the following sales and purchases during 2011, its first year of business: January 5

Question:

Jefferson Company had the following sales and purchases during 2011, its first year of business:

January 5 Purchased 40 units at $100 each

February 15 Sold 15 units at $150 each

April 10 Sold 10 units at $150 each

June 30 Purchased 30 units at $105 each

August 15 Sold 25 units at $150 each

November 28 Purchased 30 units at $110 each

Requirements

1. Calculate the ending inventory, the cost of goods sold, and the gross profit for the December 31, 2011, financial statements under each of the following assumptions:

a. FIFO periodic

b. LIFO periodic

c. Weighted average cost periodic

2. How will the differences between the methods affect the income statement for the year and balance sheet at December 31, 2011?

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...