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S Surfer Inc. is a retailer operating in Gothum, PA.

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Given info:
S Surfer Inc. is a retailer operating in Gothum, PA. S Surfer 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 S
Surfer Inc. for the month of January 2006.

Unit Cost or
Date Description Quantity Selling Price
January 1 Beginning Inventory 50 $12
January 5 Purchase 100 14
January 8 Sale 80 25
January 10 Sale return 10 25
January 15 Purchase 30 18
January 16 Purchase return 5 18
January20 Sale 90 25
January 25 Purchase 10 20

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.
(b) Compare the results for the three cost flow assumptions

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Problem #4

Given info:
S Surfer Inc. is a retailer operating in Gothum, PA. S Surfer 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 S
Surfer Inc. for the month of January 2006.

Unit Cost or
Date Description Quantity Selling Price
January 1 Beginning Inventory 50 $12
January 5 Purchase 100 14
January 8 Sale 80 25
January 10 Sale return 10 25
January 15 Purchase 30 18
January 16 Purchase return 5 18
January20 Sale 90 25
January 25 Purchase 10 20

Instructions:
(a) For each of the following cost flow assumptions, calculate (i) cost of goods sold, (ii) ending
inventory, and (iii) gross profit.
(1) ...

Solution Summary

This solution is comprised of a detailed explanation to
(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.
(b) Compare the results for the three cost flow assumptions

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