Prepare schedules computing the ending inventory

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Problem - Cost of Goods Sold As an accountant for Lee Company, your supervisor gave you the following calculations of the gross profit for the first quarter:

Alternative

Sales ($50 per unit)

Cost of Goods Sold

Gross Profit

A

$500,000

$200,000

$300,000

B

500,000

228,000

272,000

C

500,000

213,333

286,667

The three alternative cost flow assumptions are FIFO, average, and LIFO (the alternatives are not necessarily presented in this sequence). Lee uses the periodic inventory system. The computation of the cost of goods sold under each alternative is based on the following data:

 

Units

Cost/Unit

Inventory, January 1

12,000

$20

Purchase, January 10

4,000

21

Purchase, February 15

6,000

22

Purchase, March 10

8,000

23

Required - Prepare schedules computing the ending inventory (in units and dollars) and proving the cost of goods sold shown here under each of the three alternatives.

Reference no: EM132882831

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