Assume a Waverly Sports outlet store began August 2020 with 43 pairs of water skis that cost the store $35 each. The sale price of these water skis was $67. During August, 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 August. Also compute gross profit for August 3. What is the cost of the store's August 31 inventory of water skis? 4. Assume that ending inventory declined by $205. 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. Waverly Sports uses This is apparent from the flow of costs out of inventory. For example, the August 13 sale shows unit cost of V, which came from the This is how works Requirement 2. Determine the store's cost of goods sold for August. Also compute gross profit for August The cost of goods sold is $ The gross profit for August is $0 Requirement 3. What is the cost of the store's August 31 inventory of water skis? The cost of the company's inventory at August 31 is $0 Requirement 4. Assume that ending inventory declined by $205. 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 Choose from any list or enter any number in the input fields and then continue to the next question. i Inventory Transactions -X Units Aug. 2 Sale 12 Unit Cost Unit Sale Price $ 35 $ 67 37 82 31 35 67 9 Purchase 13 Sale 18 Sale 22 Sale 5 37 68 35 37 68 29 Purchase 21 39 Print Done