Three Identical Units of Merchandise Were Purchased During May, as Follows

question 132

Essay

Three identical units of merchandise were purchased during May, as follows:?? $$\begin{array} { | c | l | c | r | } \hline & \text { Magnesium XP } & \text { Units } & { \text { Cost } } \\\hline \text { May 3 } & \text { Purchase } & 1 & \$ 130 \\\hline 10 & \text { Purchase } & 1 & 136 \\\hline 19 & \text { Purchase } & \underline { 1 } & \underline { 142 } \\\hline \text { Total } & & \underline { \mathbf { 3 } } & \underline { \mathbf { \$ 4 0 8 } } \\\hline\end{array}$$ Assume that two units are sold on May 23 for $313 total. Determine the gross profit for May and ending inventory on May 31 using
(a) FIFO,
(b) LIFO, and
(c) average cost methods.

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Definitions:

Two-Column Journal

A fundamental accounting record with two columns used for debits and credits to record financial transactions.

Debit

An accounting entry that increases an asset or expense account, or decreases a liability or equity account. It is positioned on the left side of an account ledger.

Credit

An accounting entry that increases the balance of liabilities and equity accounts or decreases the balance of an asset or expense account.

Horizontal Analysis

A financial analysis technique that evaluates the changes in the amounts of financial statement items over a period.