Jepson Electronic Center began October with 90 units of merchandise inventory that cost $70 each. During October, the store made the following purchases.

Oct.3 20 units @ $75 each

Oct.12 40 units @ $78 each

Oct. 19 60 units @ $84 each

Jepson uses the periodic inventory system, and the physical count on October 31 indicates that 110 units of merchandise inventory are on hand.

Requirements

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 $27,000. Compute Jepsons gross profit for October using each method.

3.Which method will result in the lowest income taxes for Jepson? Why? Which method will result in the highest net income for Jepson? Why?