You work for a CPA firm that has been hired by Widget Tek, a merchandising company that is getting ready to expand. The president of Widget Tek is concerned with obtaining a loan for the expansion and wants to be sure that all the financial statements accurately reflect the companys accounting records.

As preparation for this assignment, you have been asked to review the effects of changing prices on three inventory costing methods: LIFO, FIFO, and weighted average.

Identify the scenarios and inventory methods that result in the highest and lowest values for each item listed. Enter Highest, Lowest, or leave the box blank.

	Cost of Merchandise Sold	Ending Merchandise Inventory	Net Income
Weighted average, when prices are falling
Weighted average, when prices are rising
FIFO, when prices are falling
FIFO, when prices are rising
LIFO, when prices are rising
LIFO, when prices are falling

-Inventory records

Widget Teks original accountant accepted a position with another firm and left in early March. You have been asked to review the subsidiary inventory ledger record for Widget Teks main product for March.

Date	Inventory
	Quantity	Unit Cost	Total Cost
Mar. 1	850	$98.00	$83,300
	1,275	95.00	121,125
Mar. 8	650	98.00	63,700
Mar. 11	325	98.00	31,850
Mar. 14	325	98.00	31,850
	780	103.00	80,340
Mar. 22	260	98.00	25,480
Mar. 25	260	98.00	25,480
	2,000	104.00	208,000

Study the inventory record for March and answer the questions that follow.

1.	Assuming that the product sells for $155 and that 80% of sales are on account, determine the gross profit from sales for March.
2.	Making the same assumptions as in (1), determine the ending inventory cost for March.
3.	Which inventory method is being used? a. FIFO b. Weighted average c. LIFO