Three identical units of Item K113 are purchased during July, as shown below. 1 answer below »

PE 7-1A Cost flow methods

Three identical units of Item K113 are purchased during July, as shown below.

Item JC07

Units

Cost

July

9

Purchase

1

$160

17

Purchase

1

168

26

Purchase

1

176

Total

3

$504

Average cost per unit

$168

($504 ÷ 3 units)

Assume that one unit is sold on July 31 for $225.

Determine the gross profit for July and ending inventory on July 31 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) average cost methods.

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