Military Surplus began July 2018 with 90 stoves that cost $20 each. During the month, the company made the following purchases at cost:

The company sold 338 stoves and on July 31, the ending inventory consisted of 62 stoves The sales price of each stove was $ 45

1. Determine the cost of goods sold and ending inventory amounts for July under the average-cost, FIFO, and LIFO costing methods. Round the average cost per unit to two decimal places, and round all other amounts to the nearest dollar.

2. Explain why cost of goods sold is highest under LIFO. Be specific.

3. Prepare the Military Surplus income statement for July. Report gross profit. Operating expenses totaled $ 4500. The company uses average costing for inventory. The income tax rate is 32%.

July 6 120 stoves @ 130 stoves @ 60 stoves @ $25 = $ $30 = $35 = 3,000 3,900 2,100