Question

Question:Assume that Toys Galore store bought and sold a line of dolls during December as follows:

Dec. 1 Beginning merchandise inventory 13 units @ \( 9 each

8 Sale 8 units @ \) 22 each

14 Purchase 16 units @ \( 14 each

21 Sale 14 units @ \) 22 each

Requirements

1. Compute the cost of goods sold, cost of ending merchandise inventory, and grossprofit using the FIFO inventory costing method.

Short answer

Cost of goods sold:$347

Ending Inventory:$98

Gross Profit:$137

Step-by-step solution

Step-by-Step-SolutionStep1: Perpetual Inventory Record using FIFO

Date	Purchase/opening	Sales	Balance
	Units	Cost per unit	Amount	Units	Cost per unit	Amount	Units	Cost per unit	Amount
Dec 1	13	$9	$117				13	$9	$117
8				8	$22	$176	5	$9	$45
14	16	$14	$224				5 16	$9 $14	$269
21				5 9	$9 $14	$171	7	$14	$98
Total	29		$341	22		$347	7	$14	$98

Computation of gross profit

$$\begin{gathered} GrossProfit=Netrevenue-Costofgoodssold \\ =\left(22\times \$22\right)-\$347 \\ =\$484-\$347 \\ =\$137 \end{gathered}$$