Steel Fabricators began August with 55 units of iron inventory that cost $35 each. During August, 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 August using FIFO, LIFO, and weighted-average inventory costing methods. 

5. Compute gross profit for August 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:

Aug. 3 Sale 8 21 Sale 30 Purchase Purchase Units 45 75 70 10 Unit Cost $ 52 55 Unit Sales Price $ 83 85