​Willis Hardware ​

question 21

Short Answer

​Willis Hardware
​
Willis Hardware had a beginning inventory of $160,000 at cost. During the month, Willis purchased and received $100,000 in goods and had net sales of $200,000. Throughout the month, Willis maintained a 40% markup on all sales.
-Refer to Willis Hardware. What was the cost of goods sold?​

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Definitions:

FIFO Method

An inventory valuation method that assumes the first items placed into inventory are the first sold, thus expenses are based on the oldest costs.

Latest Goods On Hand

Refers to the most recent inventory of products or materials that a company has available for use or sale.

Lower-Of-Cost-Or-Market Basis

An accounting principle where inventory is recorded at either its historical cost or market value, whichever is lower, to ensure conservatism.

Conservatism

An accounting principle that requires potential expenses and liabilities to be recognized immediately, but revenue only when it is ensured.