Scrappers Supplies tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Units 180 Unit Cost $ 28 Transactions Beginning inventory, January 1 Transactions during the year: a. Purchase on account, March 2 b. Cash sale, April 1 ($44 each) c. Purchase on account, June 30 d. Cash sale, August 1 ($44 each) 30 290 (330) 230 (55) 34 TIP: Although the purchases and sales are listed in chronological order, Scrappers determines the cost of goods sold after all of the purchases have occurred. Required: 1. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: (Round "Cost per Unit" to 2 decimal places.) a. Last-in, first-out. b. Weighted average cost. c. First-in, first-out. d. Specific identification, assuming that the April 1 sale was selected one-fifth from the beginning inventory and four-fifths from the purchase of March 2. Assume that the sale of August 1 was selected from the purchase of June 30. 2. Of the four methods, which will result in the highest gross profit? Which will result in the lowest income taxes? Req 1A Reg 1B Reg 1c Reg 1D Req 2A Req 2B a. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December LIFO method. (Round "Cost per Unit" anwers to 2 decimal places.) LIFO (Periodic) Units Cost per Unit Total 180 $ 28.00 $ 5,040 Beginning Inventory Purchases March 2 290 $ 30.00 June 30 230 $ 34.00 Total Purchases 520 16,520 21,560 Goods Available for Sale 700 Cost of Goods Sold 0 $ 0.00 Units from Beginning Inventory Units from March 2 Purchase 190 $ 30.00 Units from June 30 Purchase 230 $ 34.00 Total Cost of Goods Sold 420 13,520 Ending Inventory Complete this question by entering your answers in the tabs below. Assessment Tool iFrame Req 1A Reg 1B Reg 1c Reg 1D Req 2A Req 2B b. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 u Weighted average method. (Round "Cost per Unit" anwers to 2 decimal places.) Weighted Average Cost (Periodic) Units Total Cost per Unit $ 28.00 $ 180 5,040 Beginning Inventory Purchases March 2 290 $ 30.00 June 30 230 $ 34.00 Total Purchases 520 16,520 Goods Available for Sale 700 21,560 Cost of Goods Sold 230 X $ 0 Ending Inventory 520
