Inventory Costing MethodsPeriodic System

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

	Units	Unit Cost
Beginning inventory	202	$9
Purchases:
March 5	297	10
June 12	401	11
August 23	254	12
October 2	153	14

During the year, Carter sold 1,015 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	$
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?