Inventory Costing MethodsPeriodic System

The following information is available concerning the inventory of Carter Inc.:

	Units	Unit Cost
Beginning inventory	198	$12
Purchases:
March 5	295	13
June 12	403	14
August 23	245	15
October 2	150	17

During the year, Carter sold 1,002 units. It uses a periodic inventory system.

Required:

1. Calculate ending inventory and cost of goods sold for each of the following three methods:

In your calculations round average unit cost to the nearest cent, and round all other calculations and your final answers to the nearest dollar.

Cost Flow Assumption	Ending Inventory	Cost of Goods Sold
a. Weighted average	$	$
b. FIFO	$	$
c. LIFO	$	$

2. Assume an estimated tax rate of 30%. How much more or less (indicate which) will Carter pay in taxes by using FIFO instead of LIFO?

Difference in taxes under FIFO vs. LIFO