Contractor Supply Company is a wholesaler for commercial builders. The company uses a periodic inventory system. The data concerning Kemtone cooktops for the year 20X8 follow:

The sales during 20X8 were made at the following selling prices:

1. Prepare a comparative statement of gross profit for the year ended December 31, 20X8, using FIFO, LIFO, and average cost inventory methods. Remember that when average cost is used with the periodic inventory system we refer to it as the weighted-average method.

2. By how much would income taxes differ if Contractor Supply Company had used LIFO instead of FIFO for Kemtone cooktops? Assume a 40% income tax rate.

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Units Purchases Units Sold Balance 110 $50 $5,500 December 31, 20X7 February 10, 20X8 April 14 May 9 July 14 October 21 November 12 Total December 31, 20X8 80 $604,800 60 120$708,400 100 @ $80$8,000 $21,200 120 80 260 300 150? 60 units $905,400 120 units 10012,000 80 units 1108,800 $26,200 260