The following information is taken from the records of East Oak Distributors Inc. The company uses the perpetual inventory system.

*for specific identification, sold 175 units of purchase #1 and all units of purchase #2.
**for specific identification, sold 20 units of opening inventory, 300 units of purchase #3, and 80 units of purchase #4.
Required:
1. Calculate cost of goods sold and the cost of ending inventory under each of the following inventory cost flow assumptions:
a. FIFO
b. Specific identification
c. Weighted average.
2. Assume each unit was sold for $5. Complete the following partial income statements :

3. Which costing method would you choose if you wished to maximize net income? Maximize ending inventory value?

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Unit Units Cost May 1 Opening Inventory 100 $1 Date 5 6 12 13 19 29 30 Sale #1 Purchase #1 Purchase #2 Sale #2* Purchase #3 Purchase #4 Sale #3"* 80 200 125 300 350 150 400 Spec. Wtd. Ident.Avg. FIFO Sales Cost of goods sold_ Gross profit