Alternative Inventory Methods Garrett Company has the following transactions during the months of April and May: Date April 1 Transaction Units Cost/Unit Balance 300 Purchase 200 $5.40 17 25 Sale 150 28 Purchase 100 5.70 May 5 Purchase 250 5.40 18 Sale 300 22 Sale 50 The cost of the inventory on April 1 is $5, $4, and $2 per unit, respectively, under the FIFO, average, and LIFO cost flow assumptions. Required: 1. Compute the inventories at the end of each month and the cost of goods sold for each month for the following alternatives: a. FIFO periodic Cost of Goods Sold Ending Inventory April $ 750 $ 2,400 May $ 1,750 X $ b. FIFO perpetual Cost of Goods Sold Ending Inventory April $ $ May $ c. LIFO periodic Cost of Goods Sold Ending Inventory April May d. LIFO perpetual (Round your intermediate calculations to the nearest cent.) Cost of Goods Sold Ending Inventory April $ $ May $ e. Weighted average (Round unit costs to 4 decimal places and final answers to the nearest dollar.) Cost of Goods Sold Ending Inventory April $ $ May f. Moving average (Round unit costs to 2 decimal places and final answers to nearest dollar.) Cost of Goods Sold Ending Inventory April $ May $ 2. Reconcile the difference between the LIFO periodic and the LIFO perpetual results. If an amount is zero, enter "0". April Cost of Goods Sold Ending Inventory Difference $ $ May Cost of Goods Sold Ending Inventory Difference $ 3. If Garrett uses IFRS, which of the previous alternatives would be acceptable, and why? If Garrett Company uses IFRS, it may report its inventory under FIFO, average, or specific identification It may not use LIFO under IFRS because it is not consistent with any presumed physical flow of inventory. Also, LIFO is not allowed for tax purposes in most other countries, so there is no tax incentive for a company to use LIFO . Note that companies that use IFRS and have rising inventory costs will report a higher income because they include holding gains in income