Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory (ending inventory December 31, prior year), 2,060 units at $35; purchases, 7,850 units at $37; expenses (excluding income taxes), $193,400; ending inventory per physical count at December 31, current year, 1,610 units; sales, 8,300 units; sales price per unit, $78; and average income tax rate, 34 percent.

E7-11 Part 1

Required:

1-a. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods.

1-b. Prepare income statements under the FIFO, LIFO, and average cost inventory costing methods.