Ornamental Iron Works began January with 45 units of iron inventory that cost $ 24 each. During January, the company completed the following inventory transactions:

Requirements

1. Prepare a perpetual inventory record for the merchandise inventory using the FIFO inventory costing method.

2. Prepare a perpetual inventory record for the merchandise inventory using the LIFO inventory costing method.

3. Prepare a perpetual inventory record for the merchandise inventory using the weighted-average inventory costing method.

4. Determine the company’s cost of goods sold for January using FIFO, LIFO, and weighted-average inventory costing methods.

5. Compute gross profit for January using FIFO, LIFO, and weighted-average inventory costing methods.

6. If the business wanted to maximize gross profit, which method would it ­select?

Transcribed Image Text:

Units Unit Cost Unit Sale Price Jan. 3 Sale 35 $51 8 Purchase 70 $32 21 Sale 65 73 30 Purchase 25 47