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Date 28 Purchase 50 Alternative Inventory Methods Garrett Company has the following transactions during the months of April and May: Transaction Units Cost/Unit April Balance 300 17 Purchase 200 15.20 25 Sale 150 100 5.70 May 5 Purchase 250 5.20 300 22 Sale 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 wentary 750 2.360 1.790 1,870 D. FIFO perpetual Cost of Goods Sold Ending Inventory April 2,360 1.790 C. LIFO periodic Cost of Goods Sold Ending Inventory April Hay May 5 1,870 April 5 8.30 1,380 1,820 860 May d. LIFO perpetual (Round your intermediate calculations to the nearest cent.) Cost of Goods Sold Ending Inventory April 780 1.430 1.870 360 e. Weighted average (Round unit costs to 4 decimal places and final answers to the nearest dollar.) Cost of Goods Sold Ending Inventory April 703 5 2,101 Hay 1,704 1,704 f. Moving average (Round unit costs to 2 decimal places and final answers to nearest dollar.) Cost of Goods Sold Ending Inventory 672 April 5 2.138 1.719 1,719 2. Reconcile the difference between the LIFO periodic and the LIFO perpetual results. If an amount is zero, enter "0". Cost of Goods Sold Ending Inventory April Difference $ 50 $ -50 May Cost of Goods Sold Ending Inventory Difference $ -50 $ 0 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, LIFOY is not allowed for tax purposes in most other countries, so there is no tax incentive for a company to use LIFOY. Note that companies that use IFRS and have rising inventory costs will report a higher income because they include holding gains in income