Calculate cost of goods sold-ending inventory

Reference no: EM13826659

Problem:

Wave Riders Surfboard Company began business on January 1 of the current year. Purchases of surfboards were as follows:

1/3:	100 boards @ $125
3/17:	50 boards @ $130
5/9:	246 boards @ $140
7/3:	400 boards @ $150
10/23:	74 boards @ $160

Wave Riders sold 710 boards at an average price of $250 per board. The company uses a periodic inventory system.

Instructions

a. Calculate cost of goods sold, ending inventory, and gross profit under each of the following inventory valuation methods:

First-in, first-out
Last-in, first-out
Weighted average

b. Which of the three methods would be chosen if management's goal is to

(1) Produce an up-to-date inventory valuation on the balance sheet?

(2) Show the lowest net income for tax purposes?

Reference no: EM13826659

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