Navy Surplus began July 2021 with 80 stoves that cost $10 each. During the month, the company
Question:
Navy Surplus began July 2021 with 80 stoves that cost $10 each. During the month, the company made the following purchases at cost:
The company sold 250 stoves, and at July 31, the ending inventory consisted of 50 stoves. The sales price of each stove was $52.
Requirements
1. Determine the cost of goods sold and ending inventory amounts for July under the average cost, FIFO, and LIFO costing methods. Round the average cost per unit to two decimal places, and round all other amounts to the nearest dollar.
2. Explain why cost of goods sold is highest under LIFO. Be specific.
3. Prepare the Navy Surplus income statement for July. Report gross profit. Operating expenses totaled $3,250. The company uses average costing for inventory. The income tax rate is 40%.
Step by Step Answer:
a AverageCost Method The average cost per unit is calculated as follows 80 10 90 20 100 25 30 3...View the full answer
