Reference no: EM132880560

Question - You are busy establishing both divisions of your business (catering and mixer sales) and completing your business degree. Your goals for the next 11 months are to sell one mixer per month and to hold two to three catering events per week for your bakery business.

The cost of mixers is expected to increase. You have just negotiated new terms with Esquiver that include shipping costs in the negotiated purchase price (mixers will be shipped FOB destination). Assume that you decided to use a periodic inventory system and now must choose a cost flow assumption for her mixer inventory.

The following transactions occur in February to May 2021.

Feb 2 You buy two mixers on account from Esquiver Supply Co. for $1,200 ($600 each), FOB destination, terms n/30.

Feb 16 You sell one mixer for $1,150 cash.

Feb 25 You pay the amount owed to Esquiver.

Mar. 2 You buy one mixer on account from Esquiver Supply Co. for $618, FOB destination, terms n/30.

Mar. 30 You sell two mixers for a total of $2,300 cash.

Mar. 31 You pay the amount owed to Esquiver.

Apr. 1 You buy two mixers on account from Esquiver Supply Co. for $1,224 ($612 each), FOB destination, terms n/30.

Apr. 13 You sell three mixers for a total of $3,450 cash.

Apr. 30 You pay the amounts owed to Esquiver.

May 4 You buy three mixers on account from Esquiver Supply Co. for $1,875 ($625 each), FOB destination, terms n/30.

May 27 You sells one mixer for $1,150 cash.

Required -

Determine the cost of goods available for sale. Assume that at the end of January, you had three mixers on hand at a cost of $595 each.

Calculate the ending inventory under the LIFO, FIFO, and average cost methods.

Calculate the cost of goods sold under the LIFO, FIFO, and average cost methods.

Calculate the gross profit under the LIFO, FIFO, and average cost methods, and

Calculate the gross profit rate under the LIFO, FIFO, and average cost methods.