Inventory information for Part 311 of Blue Corp. discloses the following informa

Question

Inventory information for Part 311 of Blue Corp. discloses the following information for the month of June. Assuming that the periodic inventory method is used, compute the cost of goods sold and ending inventory under (1) LIFO and (2) FIFO. Assuming that the perpetual inventory method is used and costs are computed at the time of each withdrawal, what is the gross profit if the inventory is valued at FIFO?

June 1 Balance 297 units @ $14 June 10 Sold 204 units @ $35 11 Purchased 803 units @ $17 15 Sold 497 units @ $36 20 Purchased 505 units @ $19 27 Sold 296 units @ $39

Explanation / Answer

Cost of goods sold and ending inventory under (1) LIFO and (2) FIFO is as calculated below:

gross profit if the inventory is valued at FIFO by perpetual method is:

FIFO Date Explanation Units Unit Cost Cost Jun-01 Opening Inventory 297 14.00 4,158 Jun-11 Purchased Inventory 803 17.00 13,651 Jun-20 Purchased Inventory 505 19.00 9,595 Cost of goods available for sale 1,605 27,404 Jun-30 Ending Inventory Goods Purchased on June 11 103 17.00 1,751 Goods Purchased on June 20 505 19.00 9,595 608 11,346 Cost of goods sold Opening Inventory 297 14.00 4,158 Goods Purchased on June 11 700 17.00 11,900 997 16,058 LIFO Date Explanation Units Unit Cost Cost Jun-01 Opening Inventory 297 14.00 4,158 Jun-11 Purchased Inventory 803 17.00 13,651 Jun-20 Purchased Inventory 505 19.00 9,595 Cost of goods available for sale 1,605 27,404 Jun-30 Ending Inventory Opening Inventory 297 14 4,158 Goods Purchased on June 11 311 17.00 5,287 608 9,445 Cost of goods sold Goods Purchased on June 20 505 19.00 9,595 Goods Purchased on June 11 492 17.00 8,364 997 17,959

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