1. Compute the cost of goods sold (4 marks) and $ value of ending inventory under FIFO.

2. Compute Gross Margin under FIFO

3.

The inventory of Ohua Company was destroyed by a major flood on January 1, 2020. From an examination of the accounting records, the following information for the year ended December 31, 2019 are obtained from aa review of the accounting records.

Sales $412,500

Sales Returns and Allowances 15,000

Purchases 258,750

Freight-In 7,500

Purchase Discounts 10,500

Required:

Determine the inventory lost by flood using the Gross Profit (Margin) Method, assuming a beginning inventory of $22,500 and a gross profit (margin) rate of 36% on net sales.

Unit Selling Price Unit Cost $150 156- Date Description July 1 Beg. Inventory 5 Purchase 10 Sale 16 Sale 20 Purchase 25 Sale Units 30 75 (18) (30) 36 (60) $240 246 165 2552