The table below shows the beginning inventory, purchase and sale data for T-shirts over the...
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Accounting
The table below shows the beginning inventory, purchase and sale data for T-shirts over the month of April for Gpsum Company. Gpsum maintains a perpetual inventory system and closes its accounts at the end of the year.
Date Description Units Cost
April 3
Opening balance
24
$10
11
Purchases
26
$12
14
Sale
36
21
Purchases
18
$15
25
Sale
20
Required:
Calculate the cost of merchandise sold and ending inventory under the following inventory valuation method. Show all workings!
Ending Cost of Goods Sold Inventory
FIFO (First-In, First-Out) ? ? (3 marks)
LIFO (Last-In, First-Out) ? ? (3 marks)
In a deflationary period, which of the above method gives the highest profit and why.
(2 marks)
A physical count of the T-shirt at April 30 indicated 10 units. Journalize the inventory losses based on LIFO method above. Explanation is not required.
Answer & Explanation
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