Question
Minsoo Ltd. is a retailer operating in Edmonton, Alberta. Minsoo uses the perpetual inventory method. All sales returns from customers result in the goods being
Minsoo Ltd. is a retailer operating in Edmonton, Alberta. Minsoo uses the perpetual inventory method. All sales returns from customers result in the goods being returned to inventory; the inventory is not damaged. Assume that there are no credit transactions; all amounts are settled in cash. You are provided with the following information for Minsoo Ltd. for the month of January 2019.
Date Description Quantity Selling Price
December 31 Ending inventory 160 $17
January 2 Purchase 100 21
January 6 Sale 150 40
January 9 Sale return 10 40
January 9 Purchase 80 24
January 10 Purchase return 10 24
January 10 Sale 60 45
January 23 Purchase 100 28
January 30 Sale 110 50
(a) For each of the following cost flow assumptions, calculate (i) cost of goods sold, (ii) ending inventory, and (iii) gross profit.
(1) LIFO.
(2) FIFO.
(3) Moving-average cost. (Round average cost per unit to 3 decimal places.)
(b) Compare results for the three cost flow assumptions.
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