Question
The following information relates to the inventory of Miles Hardware during the month of November: Units Unit cost Total cost Nov. 1 10 23 Beginning
The following information relates to the inventory of Miles Hardware during the month of November:
| Units | Unit cost | Total cost | |
Nov. 1 10 23 | Beginning inventory Purchases Purchases | 500 500 600 | $5.00 5.30 5.60 | $2 500 2 650 3 360 |
|
| 1 600 | $8 510 |
Miles Hardware uses the periodic inventory system. During the month, 600 units were sold for $6300. A physical stocktake on 30 November verified that 690 units were on hand. Ignore GST.
Required
Prepare an income statement up to gross profit for November using each of the following costing methods:
(a) specific identification, assuming that 300 units were sold from the beginning inventory and 300 units were sold from the first purchase
(b) FIFO
(c) LIFO
(d) weighted average.
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