Reference no: EM13507135

(Compute FIFO, LIFO, Average Cost-Periodic) Presented below is information related to radios for the Couples Company for the month of July.

Date	Transaction	Units In	Unit Cost	Total	Units Sold	Selling Price	Total
July 1	Balance	100	$4.10	$ 410
6	Purchase	800	4.30	3,440
7	Sale				300	$7.00	$ 2,100
10	Sale				300	7.30	2,190
12	Purchase	400	4.51	1804
15	Sale				200	7.40	1480
18	Purchase	300	4.60	1380
22	Sale				400	7.40	2960
25	Purchase	500	4.58	2290
30	Sale				200	7.50	1500
	Totals	2,100		$9,324	1,400		$10,230

Instructions

(a) Assuming that the periodic inventory method is used, compute the inventory cost at July 31 under each of the following cost flow assumptions.

(1) FIFO.

(2) LIFO.

(3) Weighted-average.

(b) Answer the following questions.

(1) Which of the methods used above will yield the lowest figure for gross profit for the income statement? Explain why.

(2) Which of the methods used above will yield the lowest figure for ending inventory for the balance sheet? Explain why.