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P6-5A You are provided with the following information for Najera Inc. for the month
ended June 30, 2014. Najera uses the periodic method for inventory.
Unit Cost or
Date Description Quantity Selling Price
June 1 Beginning inventory 40 $40
June 4 Purchase 135 44
June 10 Sale 110 70
June 11 Sale return 15 70
June 18 Purchase 55 46
June 18 Purchase return 10 46
June 25 Sale 65 75
June 28 Purchase 30 50
(a) Calculate (i) ending inventory, (ii) cost of goods sold, (iii) gross profi t, and (iv) gross
profi t rate under each of the following methods.
(1) LIFO. (2) FIFO. (3) Average-cost.
(b) Compare results for the three cost fl ow assumptions.