Date Inventory Costing Methods Tyler Company has the following information related to purchases and sales of one of its inventory items. Description Units Purchased at Cost Units Sold at Retail Sept. 1 Beginning inventory 400 units @ $12 10 Purchase 600 units @ $14 20 Sales 640 units @ $24 25 Purchase 1,000 units at $15 Assume Tyler uses a perpetual Inventory system. Required: Calculate ending inventory and cost of goods sold using the FIFO, LIFO, and average cost methods. LIFO Avg Cost Cost of goods sold Ending inventory 2. Which inventory costing method produces the highest amount for net income? FIFO 3. Which inventory costing method produces the lowest amount for taxes? LIFO 4. Which inventory costing method produces the highest amount for ending inventory? FIFO ELFOV Check My Work Be sure to pay attention to whether the question asks for cont of goods sold or ending inventory. Apply the following steps: Step 1. Calculate the cost of goods available for sale immediately prior to the sale transaction Stop 2. Apply the inventory coating method recognizing that Under FIFO, the earliest purchases (first in) are assumed to be the first sold (first out) and the more recent purchases are in ending inventory Under LIFO, the most recent purchases (newest costs) are allocated to cost of goods sold and the earliest purchases (oldest costs) are allocated to ending inventory Under Average cost, the cost of goods available for sale is allocated between ending inventory and cost of goods sold based on a weighted average cost per unit. Step 3. Repeat the first two steps for all inventory transactions during the period