Question
March 4 Stephen Company sold $3,000 of merchandise on account to Elijah Company. The credit terms were 2/10, n/60. The cost of the merchandise was
March 4 | Stephen Company sold $3,000 of merchandise on account to Elijah Company. The credit terms were 2/10, n/60. The cost of the merchandise was $1,800. |
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March 6 | Elijah Company paid transportation cost of $100 on the March 4 purchase from Stephen Company. |
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March 8 | Stephen Company sold $2,000 of merchandise on account to Elijah Company. The credit terms were n/40. The cost of the merchandise was $1,400. |
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March 10 | Stephen Company paid transportation cost of $100 for delivery of merchandise sold to Elijah Company on March 8. |
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March 16 | Stephen Company issued Elijah Company a $400 credit memorandum for merchandise returned because the merchandise was damaged. The merchandise was purchased by Elijah Company on account on March 8. The cost of the merchandise returned was $280. |
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March 18 | Stephen Company received payment from Elijah Company for purchase of March 8. |
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March 21 | Stephen Company sold $4,800 of merchandise on account to Elijah Company. The credit terms were 2/10, n/30. The cost of the merchandise was $2,880. |
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March 22 | Stephen Company received payment from Elijah Company for purchase of 4 March. |
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March 31 | Stephen Company received payment from Elijah Company for purchase of 21 March. |
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If cost of merchandise purchased is declining, will the weighted average or FIFO inventory costing method have lower cost of goods sold and why?
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