SWAT Surplus began March 2018 with 100 tents that cost $10 each. During the month, the company made the following purchases at cost:

The company sold 318 tents, and at March 31, the ending inventory consisted of 52 tents. The sales price of each tent was $52.

Requirements

1. Determine the cost of goods sold and ending inventory amounts for March under the average-cost, FIFO, and LIFO costing methods. Round the average cost per unit to two 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 the SWAT Surplus income statement for March. Report gross profit. Operating expenses totaled $3,250. The company uses average costing for inventory. The income tax rate is 36%.

Transcribed Image Text:

Mar 6 110 tents @ $20 = $2,200 18 120 tents @ $25 26 40 tents @ $30 %3D 3,000 1,200