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# Example Exercise 1 - PowerPoint PPT Presentation

Example Exercise 1. Inventory Cost Flow Assumptions. Example Exercise 1. Inventory Cost Flow Assumptions - FIFO. Example Exercise 1. Inventory Cost Flow Assumptions - LIFO. Example Exercise 1. Inventory Cost Flow Assumptions–Average Cost. 2. Example Exercise 1. 1. Sales \$70

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Inventory Cost Flow Assumptions

Inventory Cost Flow Assumptions - FIFO

Inventory Cost Flow Assumptions - LIFO

Inventory Cost Flow Assumptions–Average Cost

Example Exercise 1

1

Sales \$70

Less cost of merchandise sold (45)

Gross Profit \$25

Ending Inventory (\$48 + \$51) \$99

(a) FIFO

Example Exercise 1

1

Sales \$70

Less: cost of merchandise sold (51)

Gross Profit \$19

Ending Inventory (\$45 + \$48) \$93

(b) LIFO

Example Exercise 1

1

Sales \$70

Less: cost of merchandise sold (48)

Gross Profit \$22

Ending Inventory (\$48 x 2) \$96

(c) Average Cost

1

1

 For Practice: PE 1A, PE 1B