Assume that the Thumbelina Specialty store purchased and sold a line of dolls during December as follows:

Requirements 

1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method.
2. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method.
3. Which method results in a higher cost of goods sold?
4. Which method results in a higher cost of ending merchandise inventory?
5. Which method results in a higher gross profit?

Transcribed Image Text:

Dec. 1 Beginning merchandise inventory 8 Sale 14 Purchase 21 Sale 13 units @ $ 11 each 9 units @ $20 each 17 units @ $ 13 each 13 units @ $20 each