$1.$ Compute cost of goods sold and the cost of ending inventory using FIFO.

$2.$ Compute cost of goods sold and the cost of ending inventory using LIFO.

$3.$ Compute cost of goods sold and the cost of ending inventory using the average cost method.

$4.$ Prepare the journal entries to record these transactions assuming Edwards chooses to use the FIFO method.

$5.$ Conceptual Connection: Which method would result in the lowest amount paid for taxes?

CHART OF ACCOUNTS

Edwards Company

General Ledger

ASSETS

$111$ Cash

$112$ Petty Cash

$121$ Accounts Receivable

$123$ Allowance for Doubtful Accounts

$124$ Notes Receivable

$125$ Supplies

$126$ Prepaid Insurance

$127$ Prepaid Rent

$128$ Inventory

$129$ Interest Receivable

$130$ Investment

$131$ Land

$132$ Buildings

$133$ Equipment

$134$ Furniture

$135$ Trucks

$139$ Accumulated Depreciation

LIABILITIES

$211$ Accounts Payable

$212$ Notes Payable

$213$ Income Taxes Payable

$214$ Wages Payable

$215$ Utilities Payable

$216$ Insurance Payable

$217$ Rent Payable

$221$ Interest Payable

$222$ Unearned Sales Revenue

$223$ Unearned Rent Revenue

$231$ Bonds Payable

EQUITY

$311$ Common Stock

$321$ Retained Earnings

$331$ Dividends

REVENUE

$411$ Sales Revenue

$412$ Service Revenue

$413$ Interest Income

$414$ Rent Revenue

EXPENSES

$511$ Cost of Goods Sold

$512$ Advertising Expense

$513$ Supplies Expense

$514$ Utilities Expense

$515$ Rent Expense

$516$ Insurance Expense

$517$ Service Charge Expense

$518$ Bad Debt Expense

$521$ Wages Expense

$531$ Interest Expense

$532$ Depreciation Expense

$541$ Income Taxes Expense

$551$ Purchases

$552$ Purchase Returns and Allowances

$553$ Purchases Discounts

$554$ Transportation$-$In