Inventory Costing Methods—Periodic System Story Company’s inventory records for the month of November reveal the following:

Inventory, November 1 300 units @ $27.00 November 4, purchase 375 units @ $26.50 November 7, sale 450 units @ $63.00 November 13, purchase 330 units @ $26.00 November 18, purchase 225 units @ $25.40 November 22, sale 570 units @ $63.75 November 24, purchase 300 units @ $25.00 November 28, sale 165 units @ $64.50 Selling and administrative expenses for the month were $16,200. Depreciation expense was $6,000. Story’s tax rate is 35%.

Required 1. Calculate the cost of goods sold and ending inventory under each of the following three methods assuming a periodic inventory system:

(a) FIFO,

(b) LIFO, and (c)

weighted average.

2. Calculate the gross profi t and net income under each costing assumption.

3. Under which costing method will Story pay the least taxes? Explain your answer.

AppendixLO1