Question

Problem 6-08A a1-a2 (Part Level Submission) Bramble Inc. is a retailer operating in British Columbia. Bramble uses the perpetual inventory method. All sales returns from customers result in the goods being returned to inventory; the inventory is not damaged. Assume that there are no credit transactions; all amounts are settled in cash. You are provided with the following information for Bramble Inc. for the month of January 2020.

Date			Description		Quantity			Unit Cost or Selling Price
January	1		Beginning inventory		100			$21
January	5		Purchase		148			24
January	8		Sale		115			36
January	10		Sale return		10			36
January	15		Purchase		55			26
January	16		Purchase return		5			26
January	20		Sale		93			41
January	25		Purchase		26			28

For each of the following cost flow assumptions, calculate cost of goods sold, ending inventory, and gross profit. (1) LIFO. (2) FIFO. (3) Moving-average cost. (Round average-cost per unit to 3 decimal places, e.g. 12.502 and final answer to 0 decimal places, e.g. 1,250.)

		LIFO		FIFO		Moving-average
Cost of goods sold		$		$		$
Ending inventory		$		$		$
Gross profit		$		$		$

Answer 1

LIFO	Amount $
Cost of goods sold	4,852	(105 x 24 ) + ( 50 x 26 ) + (43 x 24 )
Ending Inventory	2,828	(100 x 21 ) + ( 26 x 28 )
Gross Profit	2,741	{ (105 x 36 ) + (93 x 41) } - 4,852
FIFO
Cost of goods sold	4,452	(100 x 21 ) + ( 5 x 24 ) + ( 93 x 24 )
Ending Inventory	3,228	(26 x 28 )+ ( 50 x 26) + (50 x 24 )
Gross Profit	3,141	{ (105 x 36 ) + (93 x 41) } - 4,452
Moving average
Cost of goods sold	4,590	( 105 x 22.790 ) + ( 93 x 23.622 )
Ending Inventory	3,090	( 126 x 24.525 )
Gross Profit	3,003	{ (105 x 36 ) + (93 x 41) } - 4,590
Working:
Moving average price for Jan 8 sale	22.790	{(100 x 21 ) + ( 148 x 24 )} / ( 100 + 148 )
Cost of goods sold of Jan 8 sales	2,393	(105 x 22.790 )
Moving average price for Jan 20 sale	23.622	( (248 - 105 ) x 22.790 ) + ( 50 x 26) ) / ( 143 + 50 )
Cost of goods sold of Jan 20 sales	2,197	(93 x 23.622 )
Moving Price for ending inventory	24.525	{( 100 x 23.622 ) + ( 26 x 28 ) } / 126