The records of Wright Aviation include the following accounts for inventory of aviation parts at July...

   

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The records of Wright Aviation include the following accounts for inventory of aviation parts at July 31 of the current year: (Click the icon to view the records.) Read the requirements. Requirement 1. Prepare a partial income statement through gross profit under the average, FIFO, and LIFO methods. Round average cost per unit to two decimal places and all other amounts to the nearest dollar. Wright Aviation Partial Income Statement Year Ended July 31 Average cost Use the FIFO LIFO Gross profit Requirement 2. Which inventory method would you use to minimize income tax? Explain why this method causes income tax to be the lowest. method to minimize income tax because cost of goods sold is highest (gross profit is lowest) under when inventory costs are Data Table Aug Nov Jan Apr 1 Balance 5 Purchase 24 Purchase 8 Purchase 700 units 400 units 7,300 units 600 units @ $6.00 @ $6.50 @ $7.00 @ $8.50 $ Inventory 4,200 2,600 51,100 5,100 Sales Revenue Jul 31 8,090 units $117,305 The records of Wright Aviation include the following accounts for inventory of aviation parts at July 31 of the current year: (Click the icon to view the records.) Read the requirements. Requirement 1. Prepare a partial income statement through gross profit under the average, FIFO, and LIFO methods. Round average cost per unit to two decimal places and all other amounts to the nearest dollar. Wright Aviation Partial Income Statement Year Ended July 31 Average cost Use the FIFO LIFO Gross profit Requirement 2. Which inventory method would you use to minimize income tax? Explain why this method causes income tax to be the lowest. method to minimize income tax because cost of goods sold is highest (gross profit is lowest) under when inventory costs are Data Table Aug Nov Jan Apr 1 Balance 5 Purchase 24 Purchase 8 Purchase 700 units 400 units 7,300 units 600 units @ $6.00 @ $6.50 @ $7.00 @ $8.50 $ Inventory 4,200 2,600 51,100 5,100 Sales Revenue Jul 31 8,090 units $117,305

Answer rating: 100% (QA)

1 The following table shows the partial income statement through gross profit under various inventor... View the full answer