Acct 2001 (Secto304, Spring 2018 Alex Chat 31 PM Homework: Ch 6 Wed homework Sco

Question

Acct 2001 (Secto304, Spring 2018 Alex Chat 31 PM Homework: Ch 6 Wed homework Score: 0 of 6 pts E6-23A (similar to) 10 ct 16 (1 complete Hw Score: 0.45%, 0.14 of 30 pts Question Hep Suppose a Dove store batone Masood July 2016 wutsd mechandise that cost Search Suppose the store then sold Ooo uns 7000 ng Agt Futsume te se na tawo wg purchases durg Augnis Aug 7 25.000 units a $2 108 so0 21 50 000 unts a 120 380 000 Requirements Calculate the store's goss proft under FIFO and UFO al 2. What caused the FIFO and UFO gross progreso aler? Requirement 1. Calculate the store's gross profit under both FHO and FIFO 1 aning

Explanation / Answer

1. Gross Profit by FIFO and LIFO as on August 31 is:

Working:

2. FIFO and LIFO gross profit will differ as in FIFO goods purchased first was sold first and in LIFO goods purchased last was sold first.

As the price of goods reduced so the cost of goods sold by LIFO reduced which caused the gross profit to increase in LIFO.

FIFO LIFO Sales (80,000 units) 780,000 780,000 Less: cost of goods sold 320,000 132,500 Gross Profit 460,000 647,500

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