Problem 6-05A a1-a3,b (Video)

You are provided with the following information for Sheffield Inc. for the month ended June 30, 2020. Sheffield uses the periodic method for inventory.

Date				Description		Quantity		Unit Cost or Selling Price
June		1		Beginning inventory		39		$39
June		4		Purchase		139		42
June		10		Sale		111		71
June		11		Sale return		16		71
June		18		Purchase		57		45
June		18		Purchase return		10		45
June		25		Sale		65		75
June		28		Purchase		32		50

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Calculate cost per unit. (Round answer to 2 decimal places, e.g. 5.25.)

Weighted-average cost per unit

$

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Calculate ending inventory, cost of goods sold, gross profit under each of the following methods. (1) LIFO. (2) FIFO. (3) Average-cost. (Round average-cost method answers to 2 decimal places, e.g. 1,250.25 and other answers to 0 decimal places, e.g. 1,250.)

		LIFO		FIFO		AVERAGE-COST
The ending inventory		$		$		$
The cost of goods sold		$		$		$
Gross profit		$		$		$

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Calculate gross profit rate under each of the following methods. (1) LIFO. (2) FIFO. (3) Average-cost. (Round answers to 1 decimal place, e.g. 51.2%.)

		LIFO			FIFO			AVERAGE-COST
Gross profit rate			%			%			%

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Compare the results for the three cost flow assumptions and answer the following questions.

In this period of rising prices,

FIFOAverage-costLIFO

gives the highest cost of goods sold and the

lowesthighest

gross profit.

FIFOLIFOAverage-cost

gives the lowest cost of goods sold and the

highestlowest

gross profit.