Watches R Us specializes in designer watches and leather goods. Watches R Us uses the perpetual inventory system. Assume Watches R Us began June holding 10 wristwatches that cost $50 each. During June, Watches R Us bought and sold inventory as follows

Requirements.

1. Prepare a perpetual inventory record for Watches R Us using the FIFO, LIFO, and weighted-average inventory costing methods.
2. Journalize all of Watches R Us’s inventory transactions for June under all three costing methods. Assume all sales and purchases are on account. Explanations are not required.
3. Show the computation of gross profit for each method.
4. Which method maximizes net income? Which method minimizes income taxes?

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Jun. 3 Sold 8 units for $100 each. 16 Purchased 10 units at $56 each. 23 Sold 8 units for $100 each.