Zodiac's Department store uses a periodic inventory system. Data for product PR1 include the following purchases:

Date November 11, 2021

Number of units

200

Unit cost

25

Date November 27, 2021

Number of units

300

Unit cost

$31

On November 13, 2021 Zodiac sold 350 units at $63 (selling price)and on November 29, 2021, it sold 260 units at 65$ (selling price).

Assume that Zodiac started operating on November 1st, 2021 (beginning of the period)At this date, its inventory was composed by 220 units at a unit cost of $23.

 

Instructions:

(a) Prepare the inventory schedule showing the cost of goods sold and the ending inventory for the month of November, using FIFO method and Average method.

(b) Prepare an income statement through gross profit (partial income statement) for the month ended November 30, 2021.

(c) Compare the results under each method, which method is the best for the company in case the management is "profit" oriented and which one is the best in case the management is "taxes" oriented.