Reference no: EM133060345
Question - The accounting division of XYZ Merchandising International has the following inventory details for the year ending 2020. XYZ sells each unit for $55 and updates inventory records periodically.
|
Period
|
Inventory
|
No of units
|
Unit cost
|
|
1st January
|
Opening balance
|
100
|
30
|
|
20th February
|
Purchase
|
400
|
35
|
|
15th March
|
Sold
|
150
|
|
|
2nd May
|
Purchase
|
300
|
38
|
|
30th July
|
Sold
|
200
|
|
|
20th November
|
Sold
|
120
|
|
Required -
1. Under the weighted average cost method, what are the reported cost of sales, gross profit, and ending inventory balances for 2020?
2. Under the FIFO method, what are the reported cost of sales, gross profit, and ending inventory balances for 2020?
3. Under the LIFO method, what are the reported cost of sales, gross profit, and ending inventory balances for 2020?
4. Compare the cost of sales, the ending inventory, the cost of goods available, and gross profit calculated under each valuation method.