FIFO - LIFO - Avg. Cost - Example using FIFO Inventory...

Cost per Total
Units Unit Cost
Beginning Inventory 01/01/2007 3 $35.00 $105.00 these units go to C of GS
Purchase 2 Units on 01/10/2007 2 $40.00 $80.00 1 unit goes to C of GS -- 1 unit is left in inventory
Purchase 1 Unit on 01/15/2007 1 $55.00 $55.00 this unit is left in inventory
Goods Available for Sale 6 $240.00
Ending Inventory 01/31/2007 (2) ($95.00) (1 x $55) + (1 x $40)
Cost of Goods Sold for January 4 $145.00
Income Statement
for January 1, 2007 to January 31, 2007
$400.00
Cost of Goods Sold (145.00)
Gross Margin 255.00
(20.00)
Pre-Tax Income 235.00
Income Taxes (at 15% rate) (35.25)
Net Income $199.75
Cost per Total
Units Unit Cost
Beginning Inventory 01/01/2007 3 $35.00 $105.00 1 unit goes to C of GS -- 2 units are left in inventory
Purchase 2 Units on 01/10/2007 2 $40.00 $80.00 these units go to C of GS
Purchase 1 Unit on 01/15/2007 1 $55.00 $55.00 this unit goes to C of GS
Goods Available for Sale 6 $240.00
Ending Inventory 01/31/2007 (2) ($70.00) (2 x $35)
Cost of Goods Sold for January 4 $170.00
Income Statement
for January 1, 2007 to January 31, 2007
$400.00
Cost of Goods Sold (170.00)
Gross Margin