P8-6 Lupulin Limited stocks a variety of sports equipment for sale to institutions. The following stock record card for basketballs was taken from the records at the December 31, 2017 year end: DateInvoice Number Terms Net 30 Net 30 Units Received Unit Invoice Cost Gross Invoice Amount Jan. 1 balance 15 Mar. 1511437 June 20 21332 Sept. 12 27644 Nov. 24 31269 100 60 1/5, net 30 65 1/10, net 30 90 1/10, net 30 84 1/10, net 30 76 475 $20.00 20.00 16.00 15.00 12.00 11.00 $2,000.0o 1,200.00 1,040.0o 1,350.0O 1,008.00 836.00 $7,434.00o 10624 Totals A physical inventory on December 31, 2017, reveals that 1o0 basketballs are in stock. The bookkeeper informs you that all the discounts were taken. Assume that Lupulin Limited uses a periodic inventory system and records purchases at their invoice price less discounts. During 2017, the average sales price per basketball was $22.25 Instructions DIGGING DEEPER (a) Calculate the December 31, 2017 inventory using the FIFO formula. (b) Calculate the December 31, 2017 inventory using the weighted average cost formula. (Round unit costs to the nearest cent.) (c) Prepare income statements for the year ended December 31, 2017, as far as the "gross profit" line under each of the FIFO and weighted average methods, and calculate the gross profit rate for each. Explain the difference in the gross profit under the two methods (d) If the selling prices for the basketballs that were sold follow the same pattern as their wholesale prices from the supplier, might this have an effect on the inventory cost that is reported on the December 31, 2017 balance sheet? (Hint: Review your answers to parts [a] to [c].)