Clarke company uses the periodic inventory method and had

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Clarke Company uses the periodic inventory method and had the following inventory information available:

		Units	Unit Cost	Total Cost
1-Jan	Beginning Inventory	100	$4	$400
20-Jan	Purchase	400	$5	$2,000
25-Jul	Purchase	200	$7	$1,400
20-Oct	Purchase	300	$8	$2,400
	total	1000		$6,200

A Physical count of inventory on December 31 revealed that there were 400 units on hand.

Answer the following independent questions and show computations supporting your answers:

1 Assume that the company uses FIFO method. That Value of the ending inventory at December 21 is:

2 Assume that the company uses Average-Cost method. That Value of the ending inventory at December 21 is:

3 Assume that the company uses LIFO method. That Value of the ending inventory at December 21 is:

4 Determine the difference in the amount of income that the company would have reported if it had used the FIFO method instead of the LIFO method. Would income have been greater or less?

Reference no: EM13376622

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