The following information is obtained from Rapid Corporations financial records:

Units Unit Cost Total Cost

Jan. 1 Beginning inventory 100 $10 $ 1,000

Mar. 1 Purchased 400 $12 $ 4,800

Mar. 5 Sold (250)

May 2 Purchased 100 $15 $ 1,500

Aug. 1 Sold (150)

Oct. 3 Purchased 100 $25 $ 2,500

Dec 31 Ending inventory 300 ? ?

(Per physical count)

Required:

1. Calculate the cost of the ending inventory, under the assumption that the company uses a perpetual inventory system and the moving-average method for costing inventory. (Calculate the unit price to two decimal places).

(I have attached an inventory chart on the next page)

2. Calculate the cost of the ending inventory, under the assumption that the company uses a periodic inventory system and the FIFO method for costing inventory.

(3) Using the answer to part (2):

1. Prepare the necessary year-end adjusting entries (you should have two entries) to account for the fact that the ending inventory had a total Market Value of $4,000. The company uses the allowance (indirect) method to apply the Lower of Cost and NRV model and the opening inventory had a NRV of $1,200.

2. Prepare an income statement for the company for the year ended December 31, 2019 assuming a selling price of $30 per unit and operating expenses of $4,500. Remember to use proper financial statement format!