Assume an outlet of The Runner's Store began August 2017 with 40 pairs of running shoes that cost the store $40 each. The sale price of these shoes was $70. During August, the store completed these inventory transactions:

Requirement

1. Determine the store's cost of goods sold, gross profit, and ending inventory using (a) FIFO and (b) weighted-average assuming the perpetual system is used.

2. How would your answer change under (a) FIFO and (b) weighted-average cost if the periodic system was used?

3. How do you determine which inventory system to use: perpetual or periodic?