The records of Aviation Supply Inc. include the following accounts for inventory of aviation fuel at December$31,$:

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Requirements

$1.$

Prepare a partial income statement through gross profit under the$$ weighted$-$average$-$cost and FIFO methods assuming the periodic system is used. Round$$ weighted$-$average cost per unit to four decimal places and all other amounts to the nearest dollar.

$2.$

Which inventory method would you use to minimize income$$ tax? Explain why this method causes income tax to be the lowest.

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Part $1$

Requirement $1.$ Prepare a partial income statement through gross profit under the$$ weighted$-$average$-$cost and FIFO methods. Round$$ weighted$-$average cost per unit to four decimal places and all other amounts to the nearest dollar. Begin with the heading and then enter the amounts in the income statement.

Part $2$

Weighted$-$Average

Cost

FIFO

Part $3$

Requirement $2.$ Which inventory method would you use to minimize income$$ tax? Explain why this method causes income tax to be the lowest.

Use the

$$

FIFO

weighted$-$average$-$cost

LIFO

method to minimize income tax because cost of goods sold is highest$($gross profit is$$ lowest$)$ under

$$

FIFO

weighted$-$average$-$cost

LIFO

when inventory costs are

$$

falling.

rising.

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Requirements

places and al ofher amounts to the nearest dollar

to the nearest dolar begn with the heading and then enter the anourts in he ncome stabernent