Data for Kane Ltd. are presented in P6-13A. Assume that Kane sold product SXL for $200 per unit during the year.

In P6-13A

Kane Ltd. had a beginning inventory on January 1 of 25 units of product SXL at a cost of $160 per unit. During the year, purchases were as follows:

Kane uses a periodic inventory system. At the end of the year, a physical inventory count determined that there were 20 units on hand.
Instructions
(a) Prepare a partial income statement through to gross profit for each of the two cost methods:
(1) FIFO and
(2) Average cost.
(b) Show how inventory would be reported in the current assets section of the statement of financial position for
(1) FIFO and
(2) average cost.
(c) Which cost method results in the lower inventory amount for the statement of financial position? The lower gross profit amount for the income statement?

Units 70 50 45 10 Total Cost Mar. 15 July 20 Sept. 4 Dec. 2 Unit Cost $150 145 135 125 $10,500 7,250 6,075 1,250