Tree Seedlings has the following current-year purchases and sales for its only product.

Date			Activities		Units Acquired at Cost							Units Sold at Retail
	Jan.	1		Beginning inventory		40	units	@ $2	=	$	80
	Jan.	3		Sales									30	units	@ $8
	Feb.	14		Purchase		70	units	@ $3	=	$	210
	Feb.	15		Sales									60	units	@ $8
	June	30		Purchase		90	units	@ $4	=	$	360
	Nov.	6		Sales									86	units	@ $8
	Nov.	19		Purchase		20	units	@ $5	=	$	100
				Totals		220	units			$	750		176	units

Required:

The company uses a perpetual inventory system.

a. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO.

b. Determine the costs assigned to ending inventory and to cost of goods sold using LIFO.

c. Compute the gross margin for each method.

Perpetual FIFO:

Goods Purchased

Cost of Goods Sold

Inventory Balance

Date

# of units

Cost per unit

# of units sold

Cost per unit

Cost of Goods Sold

# of units

Cost per unit

Inventory Balance

January 1

40

@

$2.00

=

$80.00

January 3

February 14

February 15

June 30

November 6

November 19

Totals

$0.00