THE UNIVERSITY OF TEXAS AT TYLER INVENTORY COST FLOW METHODS ACCT 3311 HO 9-1: Needles Co, begins operations in January, 2019 as a retailer of widgets. Its purchases and sales during the first quarter of 2019 are as below: January 1: Purchases 4 widgets for $100 cach. January 15 Purchases 2 widgets for $250. February 1: Purchases I widget for $300. March 1: Sells 5 widgets for $475 cach. Needles faces a tax rate of 30%. Assume the firm has no expenses other than cost of goods sold and taxes. Required: 1. What is Needles Co.'s net income, ending inventory and tax expense for the quarter if it uses the weighted average cost method to value inventory? 2. What is Needles Co.'s net income, ending inventory and tax expense for the quarter if it uses the FIFO method to value inventory? 3. What is Needles Co.'s net income, ending inventory and tax expense for the quarter if it uses the LIFO method to value inventory? Which method produces the highest COGS? Highest Ending Inventory? Highest sales? HO 9-2: The following information is available about Webber Company's 2019 inventory activities. Calculate cost of goods sold, gross profit, and ending inventory under each of the following inventory cost assumptions: LIFO, FIFO, and weighted-average under 1) a periodic and 2) a perpetual inventory system. WEBBER CO. 2019 INVENTORY DATA Units Cost per Unit Total cost Beginning inventory 1/1/19 2.500 SIO $25,000 Production runs: 1/30/19 2,000 24,000 2/15/19 2.100 11 23.100 5/15/19 1.400 12 16.800 8/15/19 3.000 42.000 9/04/19 1,500 17 25,500 12/15/19 18 36.000 Goods available for sale-2019 14.500 S192.400 Sales Price/Unit Units Total 6/30/19 5.200 $25.00 S130,000 11/20/19 5.750 $28.00 1611000 Total sales in 2019 10.950 $29.000 4. 12 14 2.000