Dempsey Inc. is a retailer operating in Florida. 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 2022.

Instructions

a. For each of the following cost fl ow assumptions, calculate (i) cost of goods sold, (ii) ending inventory, and (iii) gross profi t.

1. LIFO.

2. FIFO.

3. Moving-average cost. (Round unit cost to three decimal places and all other amounts to the nearest dollar.)

b. Compare results for the three cost fl ow assumptions.

Transcribed Image Text:

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