Kimco€™s sales for the year 2014 were $575,000 ($230/unit). On January 1, 2014, Kimco€™s beginning inventory showed 450 units, costing $40,500. During 2014, Kimco purchased 2,650 units at $95 each. Kimco€™s income statement is as follows.

Requirements
1. Complete the income statement for Kimco, using FIFO and weighted average cost methods.
2. Calculate the inventory turnover, using FIFO and weighted average cost methods.
3. Which method shows higher profit and inventory turnover? Explain.

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Income Statement Inventory Costing Method FIFO Units Weighted Average Sales Cost of Goods Sold: Beginning Inventory Purchases Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses Operating Income Income Tax Expense (30%) Net Income $265,000 $265,000