Spiegel Department Store has the following data for inventory, purchases, and sales of merchandise for December:

Spiegel uses a periodic inventory system. All purchases and sales are for cash.
Required:
1. Compute cost of goods sold and the cost of ending inventory using FIFO.
2. Compute cost of goods sold and the cost of ending inventory using LIFO.
3. Compute cost of goods sold and the cost of ending inventory using the average cost method.
4. Prepare the journal entries to record these transactions assuming Spiegel chooses to use the FIFO method.
5. Which method would result in the lowest amount paid for taxes?
6. What are the differences? Be sure to explain why the differences occurred.

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Sale Price (per unit) Purchase Price (per unit $6.00 6.80 7.50 Activity Beginning inventory Purchase 1, Dec. Purchase 2, Dec. 5 Sale 1, Dec. 7 Sale 2, Dec. 10 Purchase 3, Dec. 12 Sale 3, Dec. 14 Units 10 2 26 19 25 12 20 $12.00 12.00 8.00 12.00