1.

Compute cost of goods sold and ending inventory, using each of the following methods:

a.	Specific identification, with seven $165 units and four $175 units still on hand at the end
b.	Average cost
c.	FIFO
d.	LIFO

2.

Which method produces the highest cost of goods sold? Which method produces the lowest cost of goods sold? What causes the difference in cost of goods sold?

Data Table Jul 1 Beginning inventory.... 4 units @ $ 150 = $ 600 15 Purchase ............... 5 units @ 151 = $ 755 26 Purchase ................. 11 units @ 160 = $ 1,760 High Life Company's inventory records for its retail division show the following at July 31: Click the icon to view the accounting records.) At July 31, 8 of these units are on hand. Read the requirements. Requirement 1. Compute cost of goods sold and ending inventory, using each of the following four inventory methods Begin by entering the number of units sold and number of units in ending inventory. Then calculate cost of goods sold and ending inventory using (a) specific identification, then (b) average cost, then (C) FIFO, and finally (d) LIFO. (Round the average cost per unit to the nearest cent. Round all final answers to the nearest whole dollar.) Number (b) (a) Specific identification $ 1,855 $ 1,260 of units 12 8 (c) FIFO 1,835 1.280 Average cost $ 1,869 $ 1,246 Cost of goods sold Ending inventory (d) LIFO 1,911 1,204 $ $ $ $ Requirement 2. Which method produces the highest cost of goods sold? Which method produces the lowest cost of goods sold? What causes the difference in cost of goods sold? Which method produces the highest cost of goods sold? LIFO Which method produces the lowest cost of goods sold? FIFO The difference in cost of goods sold under the two methods identified above was caused by the increase in inventory unit cost