calculate COGS, Gross Profit and Ending Inventory Balances using FIFO and Weighted Average

Exercise 5-19 Effect of inventory cost flow (FIFO, LIFO, and weighted average) on gross margin The following information pertains to Baxter Company for 2014. Beginning inventory Units purchased 90 units @ $15 320 units @ $19 Ending inventory consisted of 40 units. Baxter sold 310 units at $30 each. All purchases and sales were made with cash. Required a. Compute the gross margin for Baxter Company using the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. b. What is the dollar amount of difference in net income between using FIFO versus LIFO? (Ignore income tax considerations.) c. Determine the cash flow from operating activities, using each of the three cost flow assump- tions listed in Requirement a. Ignore the effect of income taxes. Explain why these cash flows have no differences