Dempsey Inc. is a retailer operating in British Columbia. Dempsey uses the perpetual inventory method. All sales returns from customers result in the goods being returned to inventory; the inventory is not damaged. Assume that there are no credit transactions; all amounts are settled in cash. You are provided with the following information for Dempsey Inc. for the month of January 2020.
Instructions
a. For each of the following cost flow assumptions, calculate (i) cost of goods sold, (ii) ending inventory, and (iii) gross profit.
1. LIFO.
2. FIFO.
3. Moving-average cost. (Round cost per unit to three decimal places.)
b. Compare results for the three cost flow assumptions.
