Rockwood Corporation sells used surfboards in San Diego, CA and employs a periodic inventory system. During the month of July, Rockwood sells 14 units and reports the following beginning inventory and purchase information:

Date Explanation Units Unit Cost Total Cost

July 1 Beginning inventory 10 $200 $2,000

July 18 Purchase 8 210 1,680

July 22 Purchase 6 225 1,350

July 29 Purchase 4 300 1,200

Instructions

1. Compute the ending inventory at July 31 using the FIFO method.

2. Compute cost of goods sold at July 31 using the weighted-average method.

3. Compute the ending inventory at July 31 using the LIFO method.

4. Identify which method would maximize Rockwoods net income.