Three Identical Units of Merchandise Were Purchased During March, as Shown

question 215

Essay

Three identical units of merchandise were purchased during March, as shown: Assume that one unit is sold on March 23 for $1,125. Determine the gross profit for March and ending inventory on March 31 using (a) FIFO and (b) LIFO.

---

Definitions:

Contra Stockholders' Equity

Accounts on a company's balance sheet that have a negative balance, reducing the overall equity of stockholders.

Retained Earnings

The portion of net profits not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.

Paid-In Capital

The amount of capital "paid in" by investors during common or preferred stock issuances, including the par value of the shares themselves plus any additional paid-in capital.

Treasury Stock

Stocks that the original issuing company has repurchased, decreasing the total number of shares available for trade in the public market.