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 220 Unit Cost $24 Transactions Beginning inventory, January 1 Transactions during the year: a. Purchase on account, March 2 b. Cash sale, April 1 ($40 each) c. Purchase on account, June 30 d. Cash sale, August 1 ($40 each) 26 310 (370) 270 (80) 30 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 Req 1B Req 1c Req 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 31 using the LIFO method. (Round "Cost per Unit" anwers to 2 decimal places.) LIFO (Periodic) Units Cost per Unit Total Beginning Inventory 220 $ 24.00 $ 5,280 Purchases March 2 310 $ 26.00 June 30 270 $ 30.00 Total Purchases 580 16,160 21,440 Goods Available for Sale 800 Cost of Goods Sold 0 $ 24.00 Units from Beginning Inventory Units from March 2 Purchase 190 $ 26.00 Units from June 30 Purchase 270 $ 30.00 Total Cost of Goods Sold 460 13,040 8,400 Ending Inventory 340 $ Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Req 1D Req 2A Req 2B 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 220 $ 24.00 $ 5,280 Purchases March 2 310 $ 26.00 June 30 270 $ 30.00 Total Purchases 580 16,160 Goods Available for Sale 800 21,440 Cost of Goods Sold 220 $ 24.00 Units from Beginning Inventory Units from March 2 Purchase $ 26.00 Units from June 30 Purchase 0 $ 30.00 Total Cost of Goods Sold 220 5,280 Ending Inventory Req 1A Reg 1B Req 10 Req 1D Req 2A Req 2B d. CCompute 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.) Show less A Specific Identification (Periodic). Units Total Cost per Unit $ 24.00 Beginning Inventory 220 $ 5,280 Purchases March 2 310 $ 26.00 June 30 270 $ 30.00 Total Purchases 580 16,160 21,440 Goods Available for Sale 800 Cost of Goods Sold Units from Beginning Inventory $ 24.00 Units from March 2 Purchase $ 26.00 Units from June 30 Purchase $ 30.00 Total Cost of Goods Sold 0 0 Ending Inventory
