If your instructor has assigned the Appendix to this chapter, redo Problem 7-14 assuming that the company uses a periodic inventory system.
a. Calculate the cost of goods sold for October using the moving average cost flow assumption.
b. Calculate the cost of goods sold for October using the first-in, first-out cost flow assumption.
c. Which inventory cost flow assumption results in the greater net income for October? Which results in the smaller?
d. Which inventory cost flow assumption results in the larger inventory balance at the end of October? Which results in the smaller?
e. Compare your answers in parts "c" and "d" above and comment on the relationship between these items.