Futuristic Electronic Center began October with 65 units of merchandise inventory that cost $82 each. During October, the store made the following purchases:
Oct. 3 ................... 25 units @ $ 90 each
12 .......................30 units @ $ 90 each
18........................35 units @ $ 96 each
Futuristic uses the periodic inventory system, and the physical count at October 31 indicates that 80 units of merchandise inventory are on hand.
Requirements
1. Determine the ending merchandise inventory and cost of goods sold amounts for the October financial statements using the FIFO, LIFO, and weighted-average inventory costing methods.
2. Net sales revenue for October totaled $28,000. Compute Futuristic's gross profit for October using each method.
3. Which method will result in the lowest income taxes for Futuristic? Why? Which method will result in the highest net income for Futuristic? Why?