Question

You have the following information for Sheffield Corp.. Sheffield uses the periodic method of accounting for its inventory transactions. Sheffield only carries one brand and size of diamonds—all are identical. Each batch of diamonds purchased is carefully coded and marked with its purchase cost.

March 1		Beginning inventory 141 diamonds at a cost of $285 per diamond.
March 3		Purchased 207 diamonds at a cost of $365 each.
March 5		Sold 166 diamonds for $570 each.
March 10		Purchased 328 diamonds at a cost of $376 each.
March 25		Sold 386 diamonds for $705 each.

Assume that Sheffield uses the LIFO cost flow assumption. Calculate cost of goods sold. How much gross profit would the company report under this cost flow assumption?

Cost of goods sold		$
Gross profit		$

Answer 1