Solution-Determine the ending inventory balance smithson

Determine the ending inventory balance smithson would report

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Reference no: EM132497926

Smithson Corporation uses a periodic inventory system. The following information related to its merchandise inventory during the month of August 2018 is available:

Aug. 1 Inventory on hand-3,900 units; cost $7.18 each.

Aug. 8 Purchased 11,500 units for $5.71 each.

Aug. 14 Sold 8,400 units for $12.07 each.

Aug. 18 Purchased 7,400 units for $5.67 each.

Aug. 25 Sold 10,900 units for $10.01 each.

Required:

Question 1: Determine the ending inventory balance Smithson would report in its August 31, 2018, balance sheet, the cost of goods sold, and gross profit percentage it would report in its August 2018 income statement using each of the following cost flow methods:

First-in, first-out (FIFO)
Last-in, first-out (LIFO)
Average cost

Question 2: You are also required to show the comparison of different methods. Please report which method has highest gross profit and why?

Reference no: EM132497926

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Determine the ending inventory balance smithson would report

Reference no: EM132497926

Reference no: EM132497926

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