Question
Presented below is information relating to Havisham Co.s purchases of merchandise during the month of April. The company uses a periodic inventory system. 600 units
Presented below is information relating to Havisham Co.s purchases of merchandise during the month of April. The company uses a periodic inventory system. 600 units were sold at $260 unit price during the month.
Date Explanation Units Unit Cost
April. 1 B. Inventory 120 $ 200
April. 3 Purchases 160 222
April. 10 Purchases 140 250
April. 22 Purchases 375 245
Instructions:
a. Compute the ending inventory and cost of goods sold at April 30 using the FIFO and LIFO and average cost methods.
b. What is gross profit under each method?
c. Which method results in a larger amount reported for assets on the balance sheet? Which results in a larger amount reported for owners equity on the balance sheet?
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