The following three identical units of Item JC07 are purchased during April
Assume that one unit is sold on April 27 for $184. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost method.

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ABIOLATAIWO2015GO ABIOLATAIWO2015GO · Answer 1

If a unit is sold on April 27 the gross profit for April and ending inventory are:

a. First-in, first-out (FIFO) is: $40; $291.

b. Last-in, first-out (LIFO) is: $38; 289.

c. Weighted average cost method is:$39, $290.

a). First in first out (FIFO)

Gross Profit = Sales - Cost

Gross Profit = $184 - $144

Gross Profit= $40

Ending Inventory

Ending Inventory = $145 + $146

Ending Inventory= $291

b). Last in First Out (LIFO)

Gross Profit = Sales - Cost

Gross Profit = $184- $146

Gross Profit = $38

Ending Inventory = $144 + $145

Gross Profit = $289

c). Weighted average cost

Gross Profit = Sales - Cost

Gross Profit = $184- $145

Gross Profit = $39

Ending Inventory = $145 × 2

Ending inventory= $290

Inconclusion the first-in, first-out (FIFO) is: $40; $291.

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