Liberty Inc. is a retailer operating in Centralia. Liberty uses the perpetual inventory method. All sales returns from customers result in the goods being returned to inventory.
(Assume that 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 Liberty Inc. for the month of January 2014.
Unit Cost or Date Description Quantity Selling Price Dec. 31 Ending inventory 140 $14 Jan. 2 Purchase 120 15 Jan. 6 Sale 150 30 Jan. 9 Purchase 85 17 Jan. 10 Sale 70 35 Jan. 23 Purchase 100 20 Jan. 30 Sale 110 42 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. (Round cost per unit to three decimal places.)

(b) Compare results for the three cost flow assumptions.AppendixLO1