Beauty Hub Corporation is a wholesale company which sells hair care shampoos to beauty parlors and uses a perpetual inventory system. This company is located in New York, U.S.A. and therefore, is allowed to evaluate its COGS by the LIFO system. James Towers, the CFO of Beauty Hub is still deciding which method of inventory valuation to use, being that the products they sell are all identical. Purchases and sales for the first two months of the year are as the follows: Jan. 1 Beginning balance 120 units at $5 each $600 Jan. 2 Purchased 20 units at $5,25 each $105 Jan.10 Purchased 30 units at $6 each $180 Feb. 5 Purchased 50 units at $7 each $350 Feb.18 Purchased 16 units at $7.50 each $120

On February 20 the company sold 150 units to one of its important clients. Mr. Towers would like you to assist him in calculating the following under the three cost Flow assumptions FIFO, LIFO and Average method. 1. Compute COGS at the date of the sale and the ending inventory on February 28th under each of the methods indicated above. (18 points) 2. Indicate under which method the company would pay less taxes. (2 points)