Determine the cost of goods sold and gross profit

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Question - The following information for Dorado Corporation relates to the three-month period ending September 30.

Units Price per Unit Sales 475,000 $46

Beginning inventory 45,000 28

Purchases 450,000 34

Ending inventory 20,000 ?

Dorado expects to purchase 200,000 units of inventory in the fourth quarter of the current calendar year at a cost of $35 per unit, and to have on hand 65,000 units of inventory at year-end. Dorado uses the last-in, first-out (LIFO) method to account for inventory costs.

Required -

1. Determine the cost of goods sold and gross profit amounts Dorado should record for the three months ending September 30.

2. Prepare journal entries to reflect these amounts.

Reference no: EM132618207

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