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Buffalo Store uses a perpetual inventory system
Buffalo Store uses a perpetual inventory system. Last year they reported the following results Sales Sales returns Sales discounts Gross profit margin using FIFO Gross profit margin using weighted average Operating expenses $890,000 $18.000 $44.000 27 % 28 % $188,560
Prepare comparative income statements for both cost formulas Buffalo Store Condensed Income Statements FIFO Weighted average S me here to search O i Ef
Expert Solution
| Particulars | FIFO | Weighted Average |
| Sales | $ 890,000 | $ 890,000 |
| Less | ||
| Sales return | $ (18,000) | $ (18,000) |
| Sales Discount | $ (44,000) | $ (44,000) |
| Net Sales | $ 828,000 | $ 828,000 |
| COGS | $ 604,440 | $ 596,160 |
| Gross Profit | $ 223,560 | $ 231,840 |
| Operating Expenses | $ (188,560) | $ (188,560) |
| Net Profit | $ 35,000 | $ 43,280 |
I didn't know what are drop down values so i took some assumptions, if u comment with what drop down values are i will match the answer exactly.
Also one more assumption i used was gross % profit was on sales and not on cost.
Please do comment if any issues come up I will solve asap. Do leave a like on the answer if it satisfies you
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