The Ginther Power Tool Company had 100 air compressors in its January | inventory. It uses the periodic inventory system and made the following purchases of air compressors during January and February.

January 10 50 air compressors for $100 each 20 40 air compressors for $102 each February 5 20 air compressors for $104 each 18 60 air compressors for $108 each Sales during January and February were 80 air compressors and 100 air compressors, respectively. The FIFO, the average, and the LIFO costs of the air compressors in the January | inventory were $97, $95, and $62, respectively.

Required: (1) Compute the ending inventory and the cost of goods sold for each month if the company uses the following:

(a) The FIFO cost flow assumption

(b) The average cost flow assumption

(c) The LIFO cost flow assumption

(2) Which cost flow assumption provides the most realistic balance sheet amount for ending inventory? Why? Which provides the most realistic measure of income? Why?

 TYK-1