Required information P7-3 (Algo) Evaluating Four Alternative Inventory Methods Based on Income and Cash Flow L07-2, 7-3 [The following information applies to the questions displayed below.] At the end of January of the current year, the records of Donner Company showed the following for a particular item that sold at $16.80 per unit: Units Amount 690 $3,105 660 4,290 Transactions Inventory, January 1 Purchase, January 12 Purchase, January 26 Sale Sale 1,870 220 (550) (200) P7-3 Part 1 Required: 1a. Assuming the use of a periodic inventory system, compute Cost of Goods Sold under each method of inventory: average cost, FIFO, LIFO, and specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase. 1b. Assuming the use of a periodic inventory system, prepare a partial income statement under each method of inventory: (a) average cost, (b) FIFO, (c) LIFO, and (d) specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Assuming the use of a periodic inventory system, compute Cost of Goods Sold under each method of inventory: average cost, FIFO, LIFO, and specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase. (Round unit price to 2 decimal places. Input all amounts as positive values.) Show less A Average Cost Cost of Goods Sold Cost of Good Available for Sale Cost Cost of # of Goods per Units Available Unit for Sale # of Units Sold Cost per Unit Cost of Goods Sold Beginning inventory Purchases: January 12 January 26 Total $ 0 FIFO Cost of Goods Sold Cost of Goods Available for Sale Cost of Cost # of Goods Units per Available Unit for Sale # of Units Sold Cost per Unit Cost of Goods Sold $ 0 Beginning inventory Purchases: January 12 January 26 Total $ 0 0 LIFO Cost of Goods Sold Cost of Goods Available for Sale Cost of Cost # of Goods Units per Available Unit for Sale # of Units Sold Cost per Unit Cost of Goods Sold Beginning inventory Purchases: January 12 January 26 Total 0 Specific Identification Cost of Goods Sold Cost of Goods Available for Sale Cost of Cost # of Goods Units per Available Unit for Sale # of Units Sold Cost per Unit Cost of Goods Sold Beginning inventory Purchases: January 12 January 26 Total $ 0 0 $ 0 Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Assuming the use of a periodic inventory system, prepare a partial income statement under each method of inventory: (a) average cost, (b) FIFO, (C) LIFO, and (d) specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase. Show less DONNER COMPANY Partial Income Statement For the Month Ended January 31, Current Year (a) (b) (c) (d) Average FIFO LIFO Specific Cost Identification P7-3 Part 3 3. Between FIFO or LIFO, which method would result in the lower income tax expense? Assume a 30 percent average tax rate. (Round your answer to 2 decimal places.) Tax Savings Method
