Solution-Question - Inventories and Cost of Goods Sold

Question - Inventories and Cost of Goods Sold

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Question - Inventories and Cost of Goods Sold

Following is an inventory acquisition schedule for Hogwarts Corp. for 2019:

	Units	Units Cost
Beginning Inventory	4000	$20
Purchases:
February 4	2000	18
April 12	3000	16
September 10	1000	14
December 5	2500	12

During the year, Hogwarts sold 11,000 units at $30 each. All expenses except cost of goods sold and taxes amounted to $60,000. The tax rate is 30%.

Required -

1. Compute cost of goods sold and ending inventory under each of the following three method assuming a periodic inventory system: (a) Weighted Average, (b) FIFO, and (c) LIFO.

2. Prepare income statements under each of the three methods

3. Which method do you recommend so that Hogwarts pays the least amount of taxes during2019? Explain your answer.

Reference no: EM132514293

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Question - Inventories and Cost of Goods Sold

Reference no: EM132514293

Reference no: EM132514293

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