Assume an outlet of The Runner's Store began August 2020 with 40 pairs of running shoes that cost the store \(\$ 40\) each. The sale price of these shoes was \(\$ 70\). During August, the store completed these inventory transactions:

{Requirements}
1. Determine the store's cost of goods sold, gross profit, and ending inventory using

(a) FIFO and

(b) weighted-average assuming the perpetual system is used.
2. How would your answer change under

(a) FIFO and

(b) weighted-average cost if the periodic system was used?
3. Using the facts provided, identify the information that is relevant in determining which inventory system to use to keep track of the store's inventory. Specify how each information item is relevant to your decision.

Transcribed Image Text:

Units Unit Cost Unit Sale Price Aug. 3 Sale 16 $70 8 Purchase.. 80 41 11 Sale 24 19 Sale 9 24 30 Sale.... Purchase. 30 722 70 72 72 18 42