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Express Lane, a regional convenience store chain

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E6-16 Inventory methods [10–15 min]

Express Lane, a regional convenience store chain, maintains milk inventory by the
gallon. The first month’s milk purchases and sales at its Freeport, FL, location follows:

Nov 2 1 gallon @ $2.00 each
6 2 gallons @ $2.10 each
13 2 gallons @ $2.20 each
14 The store sold 4 gallons of milk to a customer.

1. Describe which costs would be sold and which costs would remain in inventory.
Then, identify the amount that would be reported in inventory on
November 15 using
a. FIFO.
b. LIFO.
c. average cost.

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