The records of Lindbergh Aviation include the following accounts for inventory of aviation fuel at July 31 of the current year:

Requirements
1. Prepare a partial income statement through gross profit under the average, FIFO, and LIFO methods. Round average cost per unit to four decimal places and all other amounts to the nearest dollar.
2. Which inventory method would you use to minimize income tax? Explain why this method causes income tax to be thelowest.

Transcribed Image Text:

Inventory Aug 1 Balce 720 units @ $7.10 5,112 Nov 5 Purchase 400 units@$7.20 2,880 Jan 24 Purchase 8,420 units$7.60 63,992 Apr 8 Purchase 480 units$8.60 4,128 Sales Revenue Jul 3 9,050 units $127,605