Assume a Watererest sports outlet store began ()ctober 2020 with 47 pairs of water skis that cost the store \(\$ 38\) each. The sale price of these water skis was \(\$ 67\). During October, the store completed these inventory transactions:

{Requirements}
1. The preceding data are taken from the store's perpetual inventory records. Which cost method does the store use? Explain how you arrived at your answer.
2. Determine the store's cost of goods sold for October. Also compute gross profit for October 3. What is the cost of the store's October 31 inventory of water skis?
4. Assume that ending inventory declined by \(\$ 200\). What value would the company report as inventory on the balance sheet? Include in your answer why it chose that value. How would it account for this difference?

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Units Unit Cost Unit Sale Price Oct. 2 Sale.. 19 $38 $67 9 Purchase. 83 40 13 Sale 28 38 67 18 Sale 10 40 68 22 Sale 34 40 68 29 Purchase.. 24 42