Gross profit percentage % %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
|
|
2020
|
2021
|
|---|---|---|
|
Ending inventory at FIFO Cost
|
$21,640
|
$31,060
|
|
Ending inventory at LIFO Cost
|
10,250
|
19,500
|
|
Cost of goods sold at FIFO Cost
|
$89,590
|
|
|
Cost of goods sold at LIFO Cost
|
101,150
|
|
|
Sales revenue
|
|
144,500
|
FIFO
LIFO
Gross profit percentage
%
%
Expert Solution
Step 1
Cost of goods sold = Opening stock + purchases + Direct expenses - closing stock.
Opening stock & Closing stocks will be adjusted in cost of goods sold. No need to adjust them in arriving gross profit.
FIFO means First in First out. (Goods which purchased first will be used in the production.)
LIFO means Last in First out. (Goods which purchased last will be used in the production.)
Gross profit = Sales - Cost of goods sold.
Gross profit% = Gross profit / Sales *100
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