Inventory Costing MethodsPeriodic System

Following is an inventory acquisition schedule for Fees Corp. for 2017:

		Units		Unit Cost
Beginning inventory		4,000		$20
Purchase:
February 4		2,000		18
April 12		3,000		16
September 10		1,000		14
December 5		2,500		12

During the year, Fees sold 11,000 units at $30 each. All expenses except cost of goods sold and taxes amounted to $60,000. The tax rate is 30%.

Required:

1. Compute cost of goods sold and ending inventory under each of the following three methods listed below assuming a periodic inventory system.

Inventory Costing Method	Ending Inventory	Cost of Goods Sold
Weighted average	$fill in the blank 850ccafb0f8dfeb_1	$fill in the blank 850ccafb0f8dfeb_2
FIFO	$fill in the blank 850ccafb0f8dfeb_3	$fill in the blank 850ccafb0f8dfeb_4
LIFO	$fill in the blank 850ccafb0f8dfeb_5	$fill in the blank 850ccafb0f8dfeb_6

2. Prepare income statements under each of the three methods.

Fees Corp.
Income Statement
For the Year Ended December 31, 2017
	Weighted Average	FIFO	LIFO
	$fill in the blank 3a515a045fdd045_2	$fill in the blank 3a515a045fdd045_3	$fill in the blank 3a515a045fdd045_4
	fill in the blank 3a515a045fdd045_6	fill in the blank 3a515a045fdd045_7	fill in the blank 3a515a045fdd045_8
	$fill in the blank 3a515a045fdd045_10	$fill in the blank 3a515a045fdd045_11	$fill in the blank 3a515a045fdd045_12
	fill in the blank 3a515a045fdd045_14	fill in the blank 3a515a045fdd045_15	fill in the blank 3a515a045fdd045_16
	$fill in the blank 3a515a045fdd045_18	$fill in the blank 3a515a045fdd045_19	$fill in the blank 3a515a045fdd045_20
	fill in the blank 3a515a045fdd045_22	fill in the blank 3a515a045fdd045_23	fill in the blank 3a515a045fdd045_24
	$fill in the blank 3a515a045fdd045_26	$fill in the blank 3a515a045fdd045_27	$fill in the blank 3a515a045fdd045_28

3. Which method do you recommend so that Fees pays the least amount of taxes during 2017?

4. Fees anticipates that unit costs for inventory will increase throughout 2018. Will Fees be able to switch from the method you recommended that it use in 2017 to another method to take advantage of the increase in prices for tax purposes?