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 $31.$

Transactions Units Unit Cost

Beginning inventory, January $1200$ $ $21$

Transactions during the year:

a$.$ Purchase on account, March $235023$

b$.$ Cash sale, April $1($$$37$ each$)(350)$

c$.$ Purchase on account, June $3025027$

d$.$ Cash sale, August $1($$$37$ each$)(90)$

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:

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 $30.$

Of the four methods, which will result in the highest gross profit? Which will result in the lowest income taxes?

a$.$ Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December $31$ using the LIFO method. $($Round "Cost per Unit" anwers to $2$ decimal places.$)$

LIFO $($Periodic$)$ Units Cost per Unit Total

Beginning Inventory $$0$

Purchases

March $2$

June $30$

Total Purchases $00$

Goods Available for Sale

Cost of Goods Sold

Units from Beginning Inventory

Units from March $2$ Purchase

Units from June $30$ Purchase

Total Cost of Goods Sold $00$

Ending Inventory

b$.$ Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December $31$ using the Weighted average method. $($Round "Cost per Unit" anwers to $2$ decimal places.$)$

Weighted Average Cost $($Periodic$)$ Units Cost per Unit Total

Beginning Inventory $$0$

Purchases

March $2$

June $30$

Total Purchases $00$

Goods Available for Sale

Cost of Goods Sold $$0$

Ending Inventory

c$.$ Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December $31$ using the FIFO method. $($Round "Cost per Unit" anwers to $2$ decimal places.$)$

FIFO $($Periodic$)$ Units Cost per Unit Total

Beginning Inventory $$0$

Purchases

March $2$

June $30$

Total Purchases $00$

Goods Available for Sale

Cost of Goods Sold

Units from Beginning Inventory

Units from March $2$ Purchase

Units from June $30$ Purchase

Total Cost of Goods Sold $00$

Ending Inventory

d$.$ Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December $31$ using the Specific identification method. Assume 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 $30.($Round "Cost per Unit" anwers to $2$ decimal places.$)$

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Specific Identification $($Periodic$)$ Units Cost per Unit Total

Beginning Inventory $$0$

Purchases

March $2$

June $30$

Total Purchases $00$

Goods Available for Sale

Cost of Goods Sold

Units from Beginning Inventory

Units from March $2$ Purchase

Units from June $30$ Purchase

Total Cost of Goods Sold $00$

Ending Inventory

Of the four methods, which will result in the highest gross profit?

Last$-$in$,$ first$-$outradio button unchecked$1$ of $4$

Weighted average costradio button unchecked$2$ of $4$

First$-$in$,$ first$-$outradio button unchecked$3$ of $4$

Specific identificationradio button unchecked$4$ of $4$

Which will result in the lowest income taxes?

Last$-$in$,$ first$-$outradio button unchecked$1$ of $4$

Weighted average costradio button unchecked$2$ of $4$

First$-$in$,$ first$-$outradio button unchecked$3$ of $4$

Specific identification