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EcoGoods Ltd. uses a periodic inventory system. Here are its inventory activities for December: Date Activity Units Unit Cost Dec. 1 Beginning Inventory 500 $40
EcoGoods Ltd. uses a periodic inventory system. Here are its inventory activities for December:
Date | Activity | Units | Unit Cost |
Dec. 1 | Beginning Inventory | 500 | $40 |
Dec. 6 | Purchase | 600 | $42 |
Dec. 12 | Sale | 700 | - |
Dec. 18 | Purchase | 300 | $45 |
Dec. 22 | Sale | 400 | - |
Specific identification details: The December 12 sale consisted of 300 units from beginning inventory and 400 units from the December 6 purchase. The December 22 sale consisted of 200 units from the December 18 purchase and 200 units from the December 6 purchase.
Required:
- Compute the ending inventory and COGS using specific identification and FIFO methods.
- Determine the gross profit using the LIFO method.
- Evaluate the impact of different inventory costing methods on EcoGoods Ltd.'s liquidity and profitability.
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