Assume a Waverly Sports outlet store began May 2020 with 42 pairs of water skis that cost the store $38 each. The sale price of these water skis was 561. During May, 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 May. Also compute gross profit for May 3. What is the cost of the store's May 31 inventory of water skis? 4. Assume that ending inventory declined by $210. 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 May 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 May. Also compute gross profit for May The cost of goods sold is $ The gross profit for May is $ Requirement 3. What is the cost of the store's May 31 inventory of water skis? The cost of the company's inventory at May 31 is $ Requirement 4. Assume that ending inventory declined by $210. 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 V 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.) Date Accounts Debit Credit Inventory Transactions Units Sale 13 Unit Cost Unit Sale Price $ 38 $ 61 40 $ Purchase 78 29 38 61 May 2 May 9 May 13 May 18 May 22 May 29 6 40 62 Sale Sale Sale Purchase 33 40 62 25 42 Print Done