E8-13 (L03) (Compute FIFO, LIFO, Average-Cost—Periodic) Presented below is information related to Blowfish radios for the Hootie Company for the month of July.

Instructions

(a) Assuming that the periodic inventory method is used, compute the inventory cost at July 31 under each of the following cost flow assumptions.
(1) FIFO.
(2) LIFO.
(3) Weighted-average.

(b) Answer the following questions.
(1) Which of the methods used above will yield the lowest figure for gross profit for the income statement? Explain why.
(2) Which of the methods used above will yield the lowest figure for ending inventory for the balance sheet? Explain why.

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Units Unit Units Selling Date Transaction In Cost Total Sold Price Total July 1 167025228 Balance 100 $4.10 $ 410 Purchase 800 4.20 3,360 Sale 300 $7.00 $ 2,100 Sale 300 7.30 2,190 Purchase 400 4.50 1,800 Sale 200 7.40 1,480 Purchase 300 4.60 1,380 Sale 400 7.40 2,960 Purchase 500 4.58 2,290 30 Sale 200 7.50 1,500 Totals 2,100 $9,240 1,400 $10,230