Futuristic Electronic Center began October with

90 units of merchandise inventory that cost $60 each. During October, the store made the following purchases:

Oct. 3 60 units @ $80 each

Oct. 12 70 units @ $82 each

Oct. 18 60 units @ $89 each

Futuristic uses the periodic inventory system, and the physical count at October 31 indicates that 140 units of merchandise inventory are on hand.

1.	Determine the ending merchandise inventory and cost of goods sold amounts for the October financial statements using the FIFO, LIFO, and weighted-average inventory costing methods.
2.	Sales revenue for October totaled $23,000. Compute Futuristic's gross profit for October using each method.
3.	Which method will result in the lowest income taxes for Futuristic? Why? Which method will result in the highest net income for Futuristic? Why?

Requirement 1. Determine the ending merchandise inventory and cost of goods sold amounts for the

October financial statements using the FIFO, LIFO, and weighted-average inventory costing methods.

	FIFO
Ending inventory
Cost of goods sold

LIFO

10200

Weighted-average

Requirement 2. Sales revenue for October totaled $23,000. Compute Futuristic's gross profit for October using each method.

	FIFO Cost	LIFO Cost	Weighted-average
Gross profit

Requirement 3. Which method will result in the lowest income taxes for

FuturisticFuturistic?

Why? Which method will result in the highest net income for

FuturisticFuturistic?

Why?The

LIFO

average-cost

LIFO

FIFO

method will result in the lowest income taxes because under this method, company's gross profit is the

lowest

highest

lowest

.Which method will result in the highest net income for Futuristic?

Why?The

FIFO

average-cost

LIFO

FIFO

method will result in the highest net income because under this method, company's gross profit is the

highest

lowest