Exercise 5-11 (Static) Perpetual: Inventory costing methodsFIFO and LIFO LO P1

Required: The company uses a perpetual inventory system. a. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. b. Determine the costs assigned to ending inventory and to cost of goods sold using LIFO. c. Compute the gross profit for each method.

	FIFO	LIFO
Sales revenue
Cost of goods sold
Gross profit	$0	$0

Required information Tree Seedlings has the following current-year purchases and sales for its only product.

Date	Activities	Units Acquired at Cost					Units Sold at Retail
January 1	Beginning inventory	40	units	@ $2	=	$ 80
January 3	Sales						30	units	@ $8
February 14	Purchase	70	units	@ $3	=	$ 210
February 15	Sales						60	units	@ $8
June 30	Purchase	90	units	@ $4	=	$ 360
November 6	Sales						86	units	@ $8
November 19	Purchase	20	units	@ $5	=	$ 100
	Totals	220	units			$ 750	176	units