P7-3 Comparing and Contrasting the Effects of Inventory Costing Methods on Financial Statement Elements LO7-2, 7-3 Neverstop Corporation sells item A as part of its product line. Information about the beginning inventory, purchases, and sales of item A are given in the following table for the first six months of the current year. The company uses a perpetual inventory system: Date January 1 (beginning inventory) January 24 February 8 March 16 June 11 Purchases Sales Number of Units Unit Cost Number of Units Sales Price 595 $4.40 395 $5.90 695 $4.50 395 $5.90 695 $4.50 Required: 1. Compute the cost of ending inventory by using the weighted-average costing method. (Do not round intermediate calculations and round the final answer to 2 decimal places.) Ending inventory 2. Compute the gross profit for the first six months of the current year by using the FIFO costing method. (Do not round intermediate calculations and round the final answer to 2 decimal places.) Gross profit Answer is not complete. No 1 Date January 24 General Journal Accounts receivable Sales 2 January 24 Cost of sales Inventory Debit 2,330.50 Credit 2,330.50 1,738.00 1,738.00 3 February 08 Inventory 3,127.50 Accounts payable 3,127.50 4 March 16 Accounts receivable Sales 2,330.50 2,330.50 5 March 16 Cost of sales Inventory Co 6 June 11 Inventory 3,127.50 Accounts payable 3,127.50 Ass Assessment Tool iFrame a clerical error, the ending inventory is reported to be 1,095 units rather than the actual number of units (1,195) on hand. 5a. If FIFO is used, calculate the amount of the understatement or overstatement in the cost of sales for the first six months of the current year. Overstatement of cost of sales 5b. If FIFO is used, calculate the amount of the understatement or overstatement in the current assets at June 30 of the current year. Understatement of current assets