effect of inventory cost flow on

Exercise 5-20 Effect of inventory cost flow on ending inventory balance and gross margin Dugan Sales had the following transactions for jackets in 2014, its first year of operations: Jan. 20 Apr. 21 July 25 Sept. 19 Purchased 80units @ $15 Purchased 420 units@$16 Purchased 250 units@$20 Purchased 150 units@$22 $1.200 6,720 5,000 3,300 During the year, Dugan Sales sold 830 jackets for $40 each Required a. Compute the amount of ending inventory Dugan would report on the balance sheet, assum- ing the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.

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