1. Ella Company had 160 units in beginning inventory at a total cost of $320. The company purchased 400 units at a total cost of $1,500. At the end of the year, Ella had 120 units in ending inventory

Beginning 160 units ($2.00) $ 320

Purchases 500 units ($3.00) 1,500

Cost of goods available for sale $1,820

A physical count of ending inventory on June 30 reveals that there are 100 units on hand.

REQUIREMENTS:

Calculate the cost of ending inventory and the cost of goods sold under FIFO, LIFO, and Average Cost. Answer the three questions below.

1. SHOW WORK - Calculate the amount allocated to ending inventory as of June 30 using:
   1. FIFO
   2. LIFO
   3. Average Cost

1. SHOW WORK - Calculate the amount allocated to cost of goods sold for the month of June using:
   1. FIFO
   2. LIFO
   3. Average Cost

1. Which inventory cost method would result in the highest net income?

1. Which inventory cost method would result in inventories approximating current cost on the balance sheet?

1. Which inventory cost method would result in Ella paying the least taxes in the first year?

1. The following information is available for Manning Company:

Beginning inventory $ 120,000Cost of goods sold 550,000Ending inventory 140,000Sales 750,000

InstructionsSHOW WORK - Compute each of the following: (a) Inventory turnover. (b) Days in inventory

(c) EXPLAIN WHAT EACH RATIOS MEAN IN WORDS