Chapter 7 Homework 7 PA7-1 (Algo) Analyzing the Effects of Four Alternative Inventory Methods in a Periodic Inventory System [LO 7-3] 1.42 points Print Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Beginning inventory, January 1 Transactions during the year! a. Purchase, January 30 b. Sale, March 14 ($100 each) c. Purchase, Hay 1 d. Sale, August 31 ($100 each) Units Saved 3,200 4,550 (2,850) 3,250 (3,300) Unit Cost $45 55 75 Assuming that for Specific identification method (item 1d) the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Required: 1, Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: a. Last-in, first-out. b. Weighted average cost. c. First-in, first-out. d. Specific identification, assuming that the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the sale of August 31 was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1 2-a. Of the four methods, which will result in the highest gross profit? 2-b. Of the four methods, which will result in the lowest income taxes? Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Req 2B Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31 under each of the inventory costing methods. (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.). a. Last-in, first-out b. Weighted average cost c. First-in, first-out d. Specific identification Amount of Goods Available for Sale Ending Inventory Reg 1 Cost of Goods Sold Req 2A > Print 2-b. Of the four methods, which will result in the Complete this question by entering your answers in the tabs below. Reg 28 Req 1 Req 2A of the four methods, which will result in the highest gross profit? Last-in, first-out Weighted average cost First-in, first-out Specific identification Complete this question by entering your answers in the tabs below. Req 1 Reg 2A Req 28 of the four methods, which will result in the lowest income taxes? OLast-in, first-out OWeighted average cost First-in, first-out OSpecific identification
