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

a.Specific identification, with two $ 150 units and six $ 160 units still on hand at the end

b.Average cost

c.FIFO

d.LIFO 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?

Jan 1

Beginning inventory. . . . . . . . . . . . . . . . . .4 units @$150 = $600

Jan 15 Purchase. . . . . . . . . . . . . . . . . . .............5 units @ 151 =$755

Jan 26. Purchase. . . . . . . . . . . . . . . . . . . . . . . . 11 units @ 160 = $1,760

2. Determine the amounts that MusicPalace should report for cost of goods sold and ending inventory two ways: (MusicPalace uses a perpetual inventory system.)

a.FIFO

b.LIFO

2.MusicPalace uses the FIFO method. Prepare the company's income statement for the month ended March 31, 2018, reporting gross profit. Operating expenses totaled $ 250, and the income tax rate was 30 %

Date Item Quantity Unit Cost Sale Price 1 Balance 16 $ Mar 49 62 2 Purchase 5 7 Sale... 6 108 6 92 13 Sale