Cornerstone Exercise 6-25 Effects of Inventory Costing Methods Filimonov Inc. has the following information related to purchases and sales of one of its inventory items: Date Description Units Purchased at Cost Units Sold at Retail June 1 Beginning Inventory 200 units @ $10 = $2,000 300 units @ $12 = $3,600 9 Purchase 1 400 units @ $25 14 Sale 1 22 Purchase 2 250 units @ $14 = $3,500 29 Sale 2 225 units @ $25 Required: 1. In a period of rising prices, which inventory costing method produces the highest amount for ending inventory? 2. In a period of rising prices, which inventory costing method produces the highest net income? 3. In a period of rising prices, which inventory costing method produces the lowest payment for income taxes? 4. In a period of rising prices, which inventory method generally produces the most realistic amount for cost of goods sold? In a period of rising prices, which inventory method generally produces the most realistic amount for inventory? Would your answer to the previous question change if inventory prices were decreasing during the period? Cornerstone Exercise 6-27 Inventory Analysis Singleton Inc. reported the following information for the current year: Net sales $650,000 495,000 Inventory, 1/1 Inventory, 12/31 $21,250 24,850 Cost of goods sold Gross profit $155,000 Required: Note: Round all answers to two decimal places. Assume a 365 day year. a. Compute Singleton's gross profit ratio. % b. Compute Singleton's inventory turnover ratio. c. Compute Singleton's average days to sell inventory. c days