5-8 A

Compute the number and total cost of the units available for sale in year 2015. Compute the amounts assigned to the 2015 ending inventory and the cost of goods sold using (a) FIFO (b) LIFO, and (c) weighted average. Corp., sold 4,000 units of its product at $50 per unit in year 2015 and incurred operating expenses of 55 per unit in selling the units. It began the year with 700 units in inventory and made successive purchases of its product as follows. Prepare comparative income statements similar to Exhibit 5.8 for the three inventory costing methods of FIFO, LIFO, and weighted average. Include a detailed cost of goods sold section as part of each statement. The company uses a periodic inventory system, and its income tax rate is 40%. How would the financial results from using the three alternative inventory costing methods change if the company had been experiencing declining costs in its purchases of inventory? What advantages and disadvantages are offered by using (a) LIFO and (b) FIFO? Assume the continuing trend of increasing costs. The records of Alaska Company provide the following information for the year ended December 31