Yuan Li Ltd. is a retailer operating in Edmonton. Alberta. Yuan Li 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 Yuan Li Ltd. for the month of January 2006.

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.

(b) Compare results for the three cost flow assumptions.

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Unit Cost or Date Description Quantity Selling Price December 31 Ending inventory 150 $17 January 2 Purchase 100 21 January 6 Sale 150 40 January 9 Sale return 10 40 January 9 Purchase 75 24 January 10 Purchase return 15 24 January 10 Sale 50 45 January 23 Purchase 100 28 January 30 Sale 160 50