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Inventory Costing MethodsPeriodic System The following information is available concerning the inventory of Carter Inc.: Units Unit Cost Beginning inventory 193 $10 Purchases: March 5

Inventory Costing MethodsPeriodic System

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

Units Unit Cost
Beginning inventory 193 $10
Purchases:
March 5 301 11
June 12 399 12
August 23 246 13
October 2 147 15

During the year, Carter sold 991 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 $fill in the blank 1 $fill in the blank 2
b. FIFO $fill in the blank 3 $fill in the blank 4
c. LIFO $fill in the blank 5 $fill in the blank 6

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 $fill in the blank 7
Does this amount represent more or less taxes paid using FIFO?

3. Assume that Carter prepares its financial statements in accordance with IFRS. Which costing method should it use to pay the least amount of taxes?

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