Requirement 2

Under LIFO the cost of goods sold is the highest because costs are ___(Falling/ Rising/ Statistic)____ and LIFO assigns the ___(most recent units purchased/ oldest units purchased/ weighted-unit average cost)____ to cost of goods sold.

Financial Accounting

Military Surplus began May 2016 with 80 stoves that cost $20 each. During the month, Military Surplus made the following purchases at cost: EEB (Click the icon to view the purchases.) Military Surplus sold 286 stoves, and at May 31, the ending inventory consists of 64 tents. The sale price of each stove was $45 Requirements 1. Determine the cost of goods sold and ending inventory amounts for May under the average cost, FIFO cost, and LIFO cost. Round average cost per unit to two decimal places, and round all other amounts to the nearest dollar Explain why cost of goods sold is highest under LIFO. Be specific. Prepare the Military Surplus income statement for May. Report gross profit. Operating expenses totaled $3,500 Military Surplus uses average costing for inventory. The income tax rate is 30% 2. 3. Requirement 1. Determine the cost of goods sold and ending inventory amounts for May under the average cost, FIFO cost, and LIFO cost. Round average cost per unit to two decimal places, and round all other amounts to the nearest dollar Number of units Average cost FIFO LIFO Cost of goods sold Ending inventory Requirement 2. Explain why cost of goods sold is highest under LIFO. Be specific. ?and LIFO assigns to Under LIFO the cost of goods sold is the highest because costs are cost of goods sold Requirement 3. Prepare Military Surplus' income statement for May. Report gross profit. Operating expenses totaled $3,500 Military Surplus uses the average costing for inventory. The income tax rate is 30%. (Round income tax expense to the nearest whole dollar.) Military Surplus Income Statement Month Ended May 31, 2016 Net income