# finance

posted by .

Bristol Sales had the following transactions for DVD’s in 2012, its first year of operations.
Jan. 20 Purchased 75 units @ \$17 = \$1,275
Apr. 21 Purchased 450 units @ \$19 = \$8,550
July 25 Purchased 200 units @ \$23 = \$4,600
Sept. 19 Purchased 100 units @ \$29 = \$2,900
During the year, Bristol Sales sold 775 DVDs for \$60 each.
a. Compute the amount of ending inventory Bristol would report on the balance sheet, assuming the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average.
b. Record the above transactions in general journal form and post to T-accounts using (1) FIFO, (2) LIFO, and (3) weighted average. Use a separate set of journal entries and T-accounts for each method. Assume all transactions are cash transactions.
c. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.

• SLU -

FIFO
75 x \$17 = \$1,275
450 x \$19 = \$8,550
200 x \$23 = \$4,600
43 x \$29 = \$1,247
Total cost of goods sold \$15,672
Ending inventory \$1,653
[\$17,325 - 15,672]

LIFO
93 x \$29 = \$2,697
200 x \$23 = \$4,600
481 x \$19 = \$9,139
25 x \$17 = \$425
Total cost of goods sold \$16,861
Ending inventory \$464
[\$17,325 - \$16,861]