Calculate the sales revenue and cost of goods sold

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Question - Three Arrows Limited ('THA') uses the perpetual inventory system and the weighted average costing method. Below is THA's record of inventory purchases and sales for the month of October 20X1.

Date

Description

Units

Units cost ($)

Unit sale price ($)

1 Oct

Beginning inventory

130

50

 

5 Oct

Purchases

104

59

 

9 Oct

Sales

110

 

85

12 Oct

Sales

64

 

90

16 Oct

Purchases

140

64

 

25 Oct

Sales

85

 

80

30 Oct

Sales

80

 

95

Required -

1. Calculate the sales revenue, cost of goods sold, and gross profit of THA for October 20X1.

2. Calculate the ending inventory of October 20X1 if THA used the FIFO costing method instead.

3. Discuss whether and briefly explain why the cost of goods sold and ending inventory of October 20X1 would be higher or lower if THA used the LIFO costing method instead.

Reference no: EM133078249

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