Assume a Swoosh Sports outlet store began July 2020 with 47 pairs of water skis that cost the store $34 each. The sale price of these water skis was $64. During July, the store completed these inventory transactions: (Click the icon to view the inventory transactions.) Requirements 1. The preceding data are taken from the store's perpetual inventory records. Which cost method does the store use? Explain how you arrived at your answer. 2. Determine the store's cost of goods sold for July. Also compute gross profit for July. 3. What is the cost of the store's July 31 inventory of water skis? 4. Assume that ending inventory declined by $215. What value would the company report as inventory on the balance sheet? Include in your answer why it chose that value. How would it account for this difference? Requirement 1. Which cost method does the store use? Explain how you arrived at your answer. Swoosh Sports uses This is apparent from the flow of costs out of inventory. For example, the July 13 sale shows unit cost of , which came from the This is how works. Requirement 2. Determine the store's cost of goods sold for July. Also compute gross profit for July. The cost of goods sold is $ The gross profit for July is $ Requirement 3. What is the cost of the store's July 31 inventory of water skis? The cost of the company's inventory at July 31 is $ The cost of the company's inventory at July 31 is $| Requirement 4. Assume that ending inventory declined by $215. What value would the company report as inventory on the balance sheet? Include in your answer why it chose that value. How would it account for this difference? The company would report ending inventory at $ because the requires inventory to be reported in the financial statements at Account for this difference by preparing the necessary journal entry. (Record debits first, then credits. Explanations are not required.) Journal Entry Date Accounts Debit Credit Inventory Transactions Units Unit Cost Unit Sale Price Jul. 2 Sale 18 $ 34 $ 64 9 Purchase 75 36 13 Sale 29 34 64 18 Sale 6 36 65 22 Sale 31 36 65 29 Purchase 26 38