*P6.8A (LO 5) Dempsey Inc. is a retailer operating in British Columbia. Dempsey 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 Dempsey Inc. for the month of January 2020. Date January 1 January 5 January 8 January 10 January 15 January 16 January 20 January 25 Description Beginning inventory Purchase Sale Sale return Purchase Purchase return Sale Purchase Quantity 100 140 110 10 55 5 90 20 Unit Cost or Selling Price 3. Moving-average cost. (Round cost per unit to three decimal places.) b. Compare results for the three cost flow assumptions. $15 18 28 28 20 20 32 22 Instructions a. For each of the following cost flow assumptions, calculate (i) cost of goods sold, (ii) ending inventory, and (iii) gross profit. 1. LIFO. 2. FIFO. Calculate cost of goods sold and ending inventory under LIFO, FIFO, and moving-average cost under the perpetual system; compare gross profit under each assumption. a. (iii) Gross profit: LIFO FIFO Average $2,160 $2,560 $2,421

*P6.8A (LO 5) Dempsey Inc. is a retailer operating in British Columbia. Dempsey 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 Dempsey Inc. for the month of January 2020. Date January 1 January 5 January 8 January 10 January 15 January 16 January 20 January 25 Description Beginning inventory Purchase Sale Sale return Purchase Purchase return Sale Purchase Quantity 100 140 110 10 55 5 90 20 Unit Cost or Selling Price 3. Moving-average cost. (Round cost per unit to three decimal places.) b. Compare results for the three cost flow assumptions. $15 18 28 28 20 20 32 22 Instructions a. For each of the following cost flow assumptions, calculate (i) cost of goods sold, (ii) ending inventory, and (iii) gross profit. 1. LIFO. 2. FIFO. Calculate cost of goods sold and ending inventory under LIFO, FIFO, and moving-average cost under the perpetual system; compare gross profit under each assumption. a. (iii) Gross profit: LIFO FIFO Average $2,160 $2,560 $2,421

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1) Sohar trading has returned goods to supplier for the damaged goods during the month May 2019, it is recorded in which of the following prime entry book? a. Sales return book b. Petty cash book c. Purchase return book d. Cash payments book
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