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 1		200			$	30
Transactions during the year:
a. Purchase on account, March 2		300				32
b. Cash sale, April 1 ($46 each)		(350	)
c. Purchase on account, June 30		250				36
d. Cash sale, August 1 ($46 each)		(50	)

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: 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 10 Req 2A a. Compute the cost of goods available for sale, cost of ending invent LIFO method. (Round "Cost per Unit" anwers to 2 decimal places.) LIFO (Periodic) Units Cost per Unit $ 30.00 Total $ 6,000 200 $ $ 32.00 36.00 300 250 550 750 18,600 24,600 Beginning Inventory Purchases March 2 June 30 Total Purchases 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 Ending Inventory $ $ 32.00 36.00 155 250 405 350 13,960 $ 10,800 b. Compute the cost of goods available for sale, cost of ending invent Weighted average method. (Round "Cost per Unit" anwers to 2 decim Weighted Average Cost (Periodic) Units Cost per Total 200 Unit $ 30.00 $ 6,000 300 250 550 $ $ Beginning Inventory Purchases March 2 June 30 Total Purchases Goods Available for Sale Cost of Goods Sold Ending Inventory 32.00 36.00 18,600 c. Compute the cost of goods available for sale, cost of ending inver FIFO method. (Round "Cost per Unit" anwers to 2 decimal places.) FIFO (Periodic) Units Cost per Unit Total Total Beginning Inventory Purchases March 2 June 30 Total Purchases 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 Ending Inventory Req 1A Req 1B Req 1C Req 1D Req 2A Req 2B 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.) Show less Specific Identification (Periodic) Units Cost per Unit Total $ 0 0 Beginning Inventory Purchases March 2 June 30 Total Purchases 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 Ending Inventory