Chapter 5 Mid-Chapter Summary Problem Suppose a division of DiY Building Products inc. has these inventory records for January 2020: Operating expense for January was $1,900, and the 300 units sold on January 24 generated sales revenue of $6,770. Name: DIY Building Products Inc. Industry: Building products Fiscal Period: Month of January 2020 Key Fact: Perpetual inventory system and periodic inventory system Requirements 1. Prepare the January income statement, showing amounts for FIFO and weighted-average cost assuming that a) a periodic inventory system is used, and b) a perpetual inventory system is used. Label the bottom line "Operating income." (Round figures to whole-dollar amounts.) Show your computations, and compute cost of goods sold. 2. Explain which inventory method would result in: a) Reporting the highest operating income b) Reporting inventory on the balance sheet at the most recent cost c) Attaining the best measure of net income for the income statement Apply and Compare Various Inventory Costing Methods Chapter 5 Mid-Chapter Summary Problem Suppose a division of DiY Building Products inc. has these inventory records for January 2020: Operating expense for January was $1,900, and the 300 units sold on January 24 generated sales revenue of $6,770. Name: DIY Building Products Inc. Industry: Building products Fiscal Period: Month of January 2020 Key Fact: Perpetual inventory system and periodic inventory system Requirements 1. Prepare the January income statement, showing amounts for FIFO and weighted-average cost assuming that a) a periodic inventory system is used, and b) a perpetual inventory system is used. Label the bottom line "Operating income." (Round figures to whole-dollar amounts.) Show your computations, and compute cost of goods sold. 2. Explain which inventory method would result in: a) Reporting the highest operating income b) Reporting inventory on the balance sheet at the most recent cost c) Attaining the best measure of net income for the income statement Apply and Compare Various Inventory Costing Methods