Dell Computer Company produces computers. The following data and descriptions are from the company's annual report ($ in millions):

Assume that Dell uses the periodic inventory system. Suppose a division of Dell had the accompanying data concerning the purchase and resale of computers ($ are not in millions):

1. For these computers only, prepare a tabulation of the cost of goods sold section of the income statement for the year ended February 3, 2012. Support your computations. Show your tabulation for four different inventory methods: 

(a) FIFO, 

(b) LIFO, 

(c) Average cost known as weighted-average for periodic inventory systems, 

(d) Specific identification. For requirement (d), assume that the purchase of February 20 was identified with the sale of March 17. Also assume that the sale of November 7 included the sale of half of the units in beginning inventory and the remainder from the purchase of June 25.

2. By how much would income taxes differ if Dell used 

(a) LIFO instead of FIFO for this inventory item, 

(b) LIFO instead of weighted average? Assume a 40% tax rate.

February 3 2012 $1,404 January 28 2011 Inventories $1,301 Total Units 100 200 150 160 160 40,000 100,000 Inventory (January 28, 2011) Purchase (February 20, 2011) Sales, March 17, 2011 (at $900 per unit) Purchase (June 25, 2011) Sales, November 7, 2011 (at $1,000 per unit) 96,000