Dempsey Inc. is a retailer operating in British Columbia. Dempsey uses the perpetual inventory method. All sales returns from customers result in the goods being returned to inventory; the inventory is not damaged. Assume that there are no credit transactions; all amounts are settled in cash. You are provided with the following information for Dempsey Inc. for the month of January 2020.

Instructions

a. For each of the following cost flow assumptions, calculate (i) cost of goods sold, (ii) ending inventory, and (iii) gross profit.

1. LIFO.

2. FIFO.

3. Moving-average cost. (Round cost per unit to three decimal places.)

b. Compare results for the three cost flow assumptions.

Transcribed Image Text:

Unit Cost or Date Description Quantity Selling Price January 1 January 5 January 8 January 10 January 15 January 16 January 20 January 25 Beginning inventory 100 $15 Purchase 140 18 Sale 110 28 Sale return 10 28 Purchase 55 20 Purchase return 5 20 Sale 90 32 Purchase 20 22