Whitewater Sports Ltd. began July 2017 with 50 backpacks that cost $19 each. The sale price of each backpack was $36. During July, Whitewater completed these inventory transactions:

Requirement
1. Determine the store's cost of goods sold, gross profit, and ending inventory using (a) FIFO and (b) weighted-average assuming the perpetual system is used.
2. How would your answer change under (a) FIFO and (b) weighted-average cost if the periodic system was used?
3. How do you determine which inventory system to use: perpetual or periodic?

Transcribed Image Text:

Units 12 37 13 Unit Cost Unit Sale Price July 2Purchase.. 8 Sale 13 Sale $20 $36 36 37 Sale 17 Purchase 22 Sale 24 15 20 37