The Midori Cabinet Company sold 2,200 cabinets during 20x7 at $160 per cabinet. Its beginning inventory on January 1 was 130 cabinets at $56. Purchases made during the year were as follows:

The company’s selling and administrative expenses for the year were $101,000. The company uses the periodic inventory system.
Required 1. Prepare a schedule to compute the cost of goods available for sale.
2. Compute income before income taxes under each of the following inventory cost flow assumptions:

(a) the average-cost method,

(b) the FIFO method, and

(c) the LIFO method.
3. User Insight: Compute inventory turnover and days’ inventory on hand under each of the inventory cost flow assumptions in requirement 2. What conclusion can you draw from this comparison?
Periodic Inventory System and Inventory Costing Methods

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February 225 cabinets @ $62 April 350 cabinets @ $65 June 700 cabinets @ $70 August 300 cabinets @ $66 October 400 cabinets @ $68 November 250 cabinets @ $72