Question
You have the following information forPharoah Company.Pharoahuses the periodic method of accounting for its inventory transactions.Pharoahonly carries one brand and size of diamondsall are identical.
You have the following information forPharoah Company.Pharoahuses the periodic method of accounting for its inventory transactions.Pharoahonly carries one brand and size of diamondsall are identical. Each batch of diamonds purchased is carefully coded and marked with its purchase cost.
March 1Beginning inventory160diamonds at a cost of $310per diamond.March 3Purchased210diamonds at a cost of $350each.March 5Sold180diamonds for $600each.March 10Purchased320diamonds at a cost of $375each.March 25Sold400diamonds for $650each.
Assume thatPharoahuses the FIFO cost flow assumption. Calculate cost of goods sold. How much gross profit would the company report under this cost flow assumption?
Cost of goods sold =
Gross profit =
Assume thatPharoahuses the LIFO cost flow assumption. Calculate cost of goods sold. How much gross profit would the company report under this cost flow assumption?
Cost of goods sold =
Gross profit =
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