Comparison of Inventory Costing Methods€”Periodic System Bitten Company€™s inventory records show 600 units on hand on October 1 with a unit cost of $5 each. The following transactions occurred during the month of October:

All expenses other than cost of goods sold amount to $3,000 for the month. The company uses an estimated tax rate of 30% to accrue monthly income taxes.

Required
1. Prepare a chart comparing cost of goods sold and ending inventory using the periodic system and the following costing methods:

2. What does the Total column represent?
3. Prepare income statements for each of the three methods.
4. Will the company pay more or less tax if it uses FIFO rather than LIFO? How much more orless?

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Date Unit Purchases Unit Sales 500 $10.00 700 $10.00 800 $11.00 October 4 9 18 20 29 800 a $5.40 700 a $5.76 800 $5.90 Cost of Goods Sold Ending Inventory Total Weighted average FIFO LIFO