Camp Surplus began May 2014 with 67 tents that cost $25 each. During the month, Camp Surplus

Camp Surplus began May 2014 with 67 tents that cost $25 each. During the month, Camp Surplus made the following purchases at cost:

Camp Surplus sold 323 tents, and at May 31 the ending inventory consists of 49 tents. The sale price of each tent was $51.

Requirements
1. Determine the cost of goods sold and ending inventory amounts for May under the average cost, FIFO cost, and LIFO cost. Round average cost per unit to two decimal places, and round all other amounts to the nearest dollar.
2. Explain why cost of goods sold is highest under LIFO. Be specific.
3. Prepare the Camp Surplus income statement for May. Report gross profit. Operating expenses totaled $3,250. Camp Surplus uses average costing for inventory. The income tax rate is30%.

Transcribed Image Text:

May 6 18 26 101 tents@ $27-$2,727 163 tents@ S29-4,727 41 tents@ $30-1,230