Jackson Company had 400 units in beginning inventory at a cost of $24 each. Jackson’s 2011 purchases were as follows:
DatePurchases
Feb. 21 .......6,100 units at $28 each
July 15 .......5,700 units at $32 each
Sept. 30 .......7,800 units at $34 each
Jackson uses a periodic inventory system and sold 19,300 units at $45 each during 2011.
Required:
1. Calculate the cost of ending inventory and the cost of goods sold using the FIFO, LIFO and average cost methods (Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar).
2. Prepare income statements through gross margin using each of the costing methods in part (1).
3. What is the effect of each inventory costing method on income?