Determine the costs assigned to ending inventory and to cost of goods sold using (a) FIFO and (b)…

Harold Co. reported the following current-year purchases and sales data for its only product.

Date

Activities

Units Acquired at Cost

 

Units Sold at Retail

Jan. 1

Beginning inventory

100 units @ $10 =

$ 1,000

 

Jan. 10

Sales

 

 

90 units @ $40

Mar. 14

Purchase

250 units @ $15 =

3,750

 

Mar. 15

Sales.

 

 

140 units @ $40

July 30

Purchase

400 units @ $20 =

8,000

 

Oct. 5

Sales

 

 

300 units @ $40

Oct. 26

Purchase 

600 units @ $25 =

15,000

 

  Totals

  1,350 units

  $27,750

  530 units

 

Harold uses a perpetual inventory system. Determine the costs assigned to ending inventory and to cost of goods sold using (a) FIFO and (b) LIFO. Compute the gross margin for each method.

Assume the periodic inventory system is used. Determine the costs assigned to ending inventory and to cost of goods sold using (a) FIFO and (b) LIFO. Then (c) compute the gross margin for each method.

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