Hill Marble buys and then resells a single product. The product, a marble, is a...
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Accounting
Hill Marble buys and then resells a single product. The product, a marble, is a commodity and is subject to rather severe cost fluctuations. Some information concerning Hill Marble inventory activity during the month of June 2020 follows:
June 2 Had 860 units on hand, @ $7 per unit
June 6 Sold 400 units
June 8 Purchased 1,000 units @ $11 per unit
June 12 Purchased 400 units @ $9 per unit
June 15 Sold 600 units
June 21 Purchased 300 units @ $6 per unit
June 24 Sold 800 units
June 30 Purchased 100 units @ $8 per unit
Required:
Hill Marble uses a periodic inventory system. Calculate cost of goods sold (in both units and cost) for the month of June 2020 and ending inventory (units and cost) at June 30, 2020:
- FIFO. (8 marks)
- LIFO. (8 marks)
- Which method resulted in the highest cost of goods sold for June? (2 marks)
- Which one will provide the highest ending inventory value for Hill's balance sheet?
(2 marks)
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