Jackson Company had 400 units in beginning inventory at a cost of $20 each. Jackson's 2019 purchases were:
Date Purchases
Feb. 21 ........................................ 5,200 units at $24 each
July 15 ......................................... 4,800 units at $28 each
Sept. 30 ........................................ 8,500 units at $30 each
Jackson uses a periodic inventory system and sold 18,500 units at $50 each during 2019.
Required:
1. Calculate the cost of ending inventory and the cost of goods sold using the FIFO, LIFO and average cost methods.
2. Prepare income statements through gross margin using each of the costing methods in Requirement 1.
3. What is the effect of each inventory costing method on income?