# Use the last-in, first-out (LIFO) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for A75 Company, considering the following transactions.

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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FindFindarrow_forward

### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 10, Problem 6PA
Textbook Problem
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## Use the last-in, first-out (LIFO) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for A75 Company, considering the following transactions.

To determine

Concept introduction:

LIFO method:

Under this method, the units purchased at last are expected to be sold first andaccordingly the COGS is calculated. The ending inventory includes the units which were purchasedinitially.

Requirement-1:

To calculate:

Sales revenue.

### Explanation of Solution

Sales revenuecalculated as follows:

 Number of Units Unit Rate Total
To determine

Concept introduction:

LIFO method:

Under this method, the units purchased at last are expected to be sold first andaccordingly theCOGS is calculated. The ending inventory includes the units which werepurchased initially.

Requirement-2:

To calculate:

Cost of goods sold.

To determine

Concept introduction:

LIFO method:

Under this method, the units purchased at last are expected to be sold first andaccordingly the COGS is calculated. The ending inventory includes the units which werepurchased initially.

Requirement-3:

To calculate:

Gross margin using LIFO perpetual inventory method.

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