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The following information is related to radios for the Couples Company for the month of July. Date Transaction Units In Units Cost Total Units Sold

The following information is related to radios for the Couples Company for the month of July.

DateTransactionUnits InUnits CostTotalUnits SoldSelling PriceTotal
July 1Balance 100$4.10$  410



 6Purchase 800 4.30 3,440



 7Sale


 300$7.00$ 2,100

10Sale


 300 7.30  2,190

12Purchase 400 4.51 1,804



15Sale


 200 7.40  1,480

18Purchase 300 4.60 1,380



22Sale


 400 7.40  2,960

25Purchase 500 4.58 2,290



30Sale     
        200 7.50  1,500


Totals2,100
$9,3241,400
$10,230


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. (Ignore taxes.)

1. FIFO.

2. Weighted-average.

b. Answer the following questions.

1. Which of the methods used above will yield the highest figure for gross profit for the income statement? Explain why.

2. Which of the methods used above will yield the highest figure for ending inventory for the statement of financial position? Explain why.

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