Assume that Toys Galore store bought and sold a line of dolls during December as follows:

Toys Galore uses the perpetual inventory system.

Requirement 1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method.

Compute the gross profit using the using the FIFO inventory costing method.

Requirement 2. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method.

Compute the gross profit using the using the LIFO inventory costing method.

Requirement 3. Which method results in a higher cost of goods sold?

Requirement 4. Which method results in a higher cost of ending merchandise inventory?

Requirement 5. Which method results in a higher gross profit?

More Info Dec. 1 Beginning merchandise inventory 8 Sale 14 Purchase 13 6 15 13 units @ $ 10 each units @ $ 20 each units @ $ 16 each units @ $ 20 each 21 Sale Print Print Done Done Purchases Cost of Goods Sold Inventory on Hand Unit Total Total Unit Total Unit Cost Date Quantity Cost Cost Quantity Cost Quantity Cost Cost Dec. 1 Dec. 8 Dec. 14 Dec. 21 Totals Compute the gross profit using the using the FIFO inventory costing method. Gross profit is $ using the FIFO inventory costing method. Purchases Cost of Goods Sold Inventory on Inventory on Hand Unit Total Unit Total Total Unit Cost Date Quantity Cost Cost Quantity Cost Quantity Cost Cost Dec. 1 Dec. 8 Dec. 14 Dec. 21 Totals Compute the gross profit using the using the LIFO inventory costing method. Gross profit is $ L u sing the LIFO inventory costing method. Requirement 3. Which method results in a higher cost of goods sold? The method with the higher cost of goods sold is FIFO. LIFO. neither, they are equal. Requirement 4. Which method results in a higher cost of ending merchandise inventory? The method with the higher cost of ending merchandise inventory is FIFO. LIFO. neither, they are equal. Requirement 5. Which method results in a higher gross profit? The method with the higher gross profit is FIFO. LIFO. neither, they are equal