Navy Seals Surplus began July $2018$ with $80$ stoves that cost $$20$ each. During the month, the company made the following purchases

at cost:

$($Click the icon to view the purchases.$)$

The comnanv sold $285$ stoves, and at July $31,$ the ending inventory consisted of $65$ stoves. The sales price of each stove was $$53.$

Ruestion Viewer irements.

Requirement $1.$ 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.

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

Under LIFO the cost of goods sold is the highest because costs are

and LIFO assigns the

to

cost of goods sold.

Requirement $3.$ Prepare Navy Seals Surplus' income statement for July. Report gross profit. Operating expenses totaled $$5,000.$ The

company uses average costing for inventory. The income tax rate is $32\%.($Round income tax expense to the nearest whole dollar.$)$

Navy Seals Surplus

Income Statement

Month Ended July $31,2018$

Net income