Required information You are the owner of a very small business that sells gourmet coffee. You sell only one product, a 12-ounce bag of whole-bean French roast coffee. You sell each bag of coffee for $14 each, but due to the fluctuation in commodity prices, the price you pay your supplier to stock the product is constantly changing. In your first month of operations, you bought bags of coffee from your supplier in the following order: (a) 2 units at $2 each on January 1, (b) 6 units at $4 each on January 8, and (c) 4 units at $8 each on January 29. Requirement 2 (of 2): Assuming you sold 7 units during the month, use the information from requirement 1 to calculate the gross profit for three alternative income statements: (a) if the coffee business chooses FIFO, (b) if the company chooses LIFO, and (c) if the company chooses weighted average cost. Sales Revenue Cost of Goods Sold Gross Profit FIFO LIFO Weighted Average Cost

Required information You are the owner of a very small business that sells gourmet coffee. You sell only one product, a 12-ounce bag of whole-bean French roast coffee. You sell each bag of coffee for $14 each, but due to the fluctuation in commodity prices, the price you pay your supplier to stock the product is constantly changing. In your first month of operations, you bought bags of coffee from your supplier in the following order: (a) 2 units at $2 each on January 1, (b) 6 units at $4 each on January 8, and (c) 4 units at $8 each on January 29. Requirement 2 (of 2): Assuming you sold 7 units during the month, use the information from requirement 1 to calculate the gross profit for three alternative income statements: (a) if the coffee business chooses FIFO, (b) if the company chooses LIFO, and (c) if the company chooses weighted average cost. Sales Revenue Cost of Goods Sold Gross Profit FIFO LIFO Weighted Average Cost

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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