Chapter : Inventories and cost of sales
AlReem Company uses a perpetual inventory system. The following information related to its merchandise inventory during the month of October :
tableDateTransaction,QuantityOctBeginning inventory, units; cost QR eachOctPurchase, units; cost QR eachOctSale, units; price QR eachOctPurchase, units; cost QR eachOctSale, units; price QR each
Required:
A Determine the inventory balance AlReem would report in its October balance sheet and cost of goods sold it would report in its October income statement using each of the following cost flow methods:
Firstin firstout FIFO
Weighted Average cost
B Which method generates highest gross profit? Show your calculations.
First In First Out FIFO:
tableDatePurchase INSale OUTBalance
Weighted Average Cost
tableDatePurchase INSale OUTBalance,tableAverageCost
