P6-62A. (Learning Objectives 2, 3: Computing inventory by three methods—perpetual system) Fatigues Surplus began October with 78 tents that cost $19 each. During the month, Fatigues Surplus made the following purchases at cost:

Fatigues Surplus sold 334 tents, and at October 31 the ending inventory consisted of 46 tents. The sale price of each tent was $52.
Requirements 1. Determine the cost of goods sold and ending inventory amounts for October under the average cost, FIFO cost, and LIFO cost. Round average cost per unit to four 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 Fatigues Surplus’ Income Statement for October. Report gross profit. Operating expenses totaled $5,400. Fatigues Surplus uses average costing for inventory. The income tax rate is 40%.

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Oct 4 99 tents @ $20 $1,980 19 155 tents @ $21 = 3,410 25 48 tents @ $23 = 1,104