FIFO and LIFO average cost - Example using FIFO Inventory Method Beginning Inventory Purchase 2 Units on Purchase 1 Unit on Goods Available for Sale

# FIFO and LIFO average cost - Example using FIFO Inventory...

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Cost per Total Units Unit Cost Beginning Inventory 01/01/2010 3 \$35.00 \$105.00 these units go to C of GS Purchase 2 Units on 01/10/2010 2 \$40.00 \$80.00 1 unit goes to C of GS -- 1 unit is left in inventory Purchase 1 Unit on 01/15/2010 1 \$55.00 \$55.00 this unit is left in inventory Goods Available for Sale 6 \$240.00 Ending Inventory 01/31/2010 (2) (\$95.00) (1 x \$55) + (1 x \$40) Cost of Goods Sold for January 4 \$145.00 Income Statement for January 1, 2010 to January 31, 2010 \$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 01/01/2010 3 \$35.00 \$105.00 1 unit goes to C of GS -- 2 units are left in inventory Purchase 2 Units on 01/10/2010 2 \$40.00 \$80.00 these units go to C of GS Purchase 1 Unit on 01/15/2010 1 \$55.00 \$55.00 this unit goes to C of GS Goods Available for Sale 6 \$240.00 Ending Inventory 01/31/2010 (2) (\$70.00) (2 x \$35) Cost of Goods Sold for January 4 \$170.00 Income Statement for January 1, 2010 to January 31, 2010 \$400.00 Cost of Goods Sold (170.00) Gross Margin