Decorative Steel 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 it­select?

Transcribed Image Text:

Unit Sale Price Units 45 75 70 10 Unit Cost Aug. 3 Sale 483 8 Purchase 21 Sale 30 Purchase 552 85