CP7-1 Analyzing the Effects of Four Alternative Inventory Costing Methods [LO 7-3] Scrappers Supplies 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. Units 180 Unit Cost $26 Transactions Beginning inventory, January 1 Transactions during the year a. Purchase on account, March 2 b. Cash sale, April 1 (542 each) C. Purchase on account, June 30 d. Cash sale, August 1 (542 each) 28 290 (330) 230 (55) 32 TIP: Although the purchases and sales are listed in chronological order, Scrappers determines the cost of goods sold after all of the purchases have occurred Required: 1. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: (Round "Cost per Unit" to 2 decimal places.) o. Last-in, first-out. b. Weighted average cost. c. First-in, first-out d. Specific identification, assuming that the April 1 salelyas selected one-fifth from the beginning inventory and four-fifths from the purchase of March 2. Assume that the sale of August 1 was selected from the purchase of June 30, 2. Of the four methods, which will result in the highest gross profit? Which will result in the lowest income taxes? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 1A Reg 13 Reg 10 Reg 10 Req 2A Reg 20 Comhand ---- Required: 1. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 under each following inventory costing methods: (Round "Cost per Unit" to 2 decimal places.) a. Last-in, first-out. b. Weighted average cost. c. First-in, first-out d. Specific identification, assuming that the April 1 sale was selected one-fifth from the beginning inventory and four-fifths fra purchase of March 2. Assume that the sale of August 1 was selected from the purchase of June 30, 2. Of the four methods, which will result in the highest gross profit? Which will result in the lowest income taxes? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 1A Reg 13 Regic Req 10 Reg 2A Reg 20 a. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 using the LIFO method. (Round "Cost per Unit" anwers to 2 decimal places.) LIEO (Periodic Cost Total por 180 $ 2600 > $ 4,680 290$ 28,00 230 $ 32.00 520 700 Beginning Inventory Purchases March 2 June 30 Total Purchases Goods Available for Sale Cost of Goods Sold Units from Beginning Inventory Units from March 2 Purchase Units from June 30 Purchase Total Cost of Goods Sold Ending Inventory 15,480 20,160 $ 26,00 X 155$ 28,00 230 S 3200 385 11,700 315 $ 8,460 TIP: Although the purchases and sales are listed in chronological order, Scrappers determines the cost of goods sold after all of the purchases have occurred. Required: 1. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: (Round "Cost per Unit" to 2 decimal places.) a. Last.in, first-out. b. Weighted average cost. c. First-in, first-out. d. Specific identification, assuming that the April 1 sale was selected one-fifth from the beginning inventory and four-fifths from the purchase of March 2. Assume that the sale of August 1 was selected from the purchase of June 30. 2. Of the four methods, which will result in the highest gross profit? Which will result in the lowest income taxes? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 1C Req 1D Req 2A Reg 28 180 b. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 using the Weighted average method. (Round "Cost per Unit" anwers to 2 decimal places.) Weighted Average Cost (Periodic) Cost Units per Total Unit Beginning Inventory $26.00 $ 4,680 Purchases March 2 290 $ 28,00 June 30 230 S 32.00 Total Purchases 520 15,480 Goods Available for Sale 700 20,160 Cost of Goods Sold 400 S 28.80 S 11,520 Ending Inventory 300 S 8.640 olo 1. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 under ea following inventory costing methods: (Round "Cost per Unit" to 2 decimal places.) a. Last-in, first-out. b. Weighted average cost, c. First-in, first-out. d. Specific identification, assuming that the April 1 sale was selected one-fifth from the beginning inventory and four-fifths purchase of March 2. Assume that the sale of August 1 was selected from the purchase of June 30. 2. Of the four methods, which will result in the highest gross profit? Which will result in the lowest income taxes? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req 1C Req 10 Reg 2A Reg 28 > C. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 using the FIFO method. (Round "Cost per Unit" anwers to 2 decimal places.) EREO (Periodic) Cost Units por Total Unit Beginning Inventory 1805 26.00 $ 4,680 Purchases March 2 290 $ 28,00 June 30 230 S 32.00 Total Purchases 520 15,480 Goods Available for Sale 700 20,160 Cost of Goods Sold Units from Beginning Inventory 180 $ 26.00 Units from March 2 Purchase 205$ 28,00 Units from June 30 Purchase $ 32.00 Total Cost of Goods Sold 385 10,420 Ending Inventory 315 S 9,740 O Blo b. Weighted average cost. c. First-in, first-out d. Specific identification, assuming that the April 1 sale was selected one-fifth from the beginning inventory and four-fifths purchase of March 2. Assume that the sale of August 1 was selected from the purchase of June 30. 2. Of the four methods, which will result in the highest gross profit? Which will result in the lowest income taxes? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req 1C Reg 10 Reg 2A Req 2B d. CCompute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 using the Specific identification method. Assume that the April 1 sale was selected one-fifth from the beginning inventory and four-fifths from the purchase of March 2. Assume that the sale of August 1 was selected from the purchase of June 30. (Round "Cost per Unit" anwers to 2 decimal places.) Show less Specific Identification (Periodic) Units Cost per Total Unit $ 26,00 S 4,680 180 290 $ 28.00 230 S 32.00 520 15,480 20,160 700 . Beginning Inventory Purchases March 2 June 30 Total Purchases Goods Available for Sale Cost of Goods Sold Units from Beginning Inventory Units from March 2 Purchase Units from June 30 Purchase Total Cost of Goods Sold Ending Inventory 66$ 25,00 264S 28.00 55S 32.00 385 315 10,868 $ 9,292