Edward's Company began operations in February 2009. Edward's accounting records provide the following data for the remainder of 2009 for one of the items the company sells:

Edward's uses a perpetual inventory system. All purchases and sales were for cash.

Required:
1. Compute cost of goods sold and the cost of ending inventory using FIFO.
2. Compute cost of goods sold and the cost of ending inventory using LIFO.
3. Compute cost of goods sold and the cost of ending inventory using the average cost method. (Use four decimal places for per unit calculations and round all other numbers to two decimal places.)
4. Prepare the journal entries to record these transactions assuming Edward's chooses to use the FIFO method.
5. Which method would result in the lowest amount paid fortaxes?

Transcribed Image Text:

Purchase Price (per unit) $90 100 110 Sale Price (per unit) Activity Units Beginning Inventory Purchase, Feb. 15 Purchase, March 22 Sale, April9 Purchase, May 29 Sale, July 10 Purchase, Sept. 10 Sale, Oct. 15 $180 180 180 12