(Learning Objective 2, 3: Computing inventory by three methods—perpetual system)

SWAT Team Surplus began July with 66 tents that cost €23 each. During the month, SWAT Team Surplus made the following purchases at cost:

SWAT Team Surplus sold 310 tents, and at July 31 the ending inventory consists of 55 tents.

The sale price of each tent was €53.

❙ Requirements 1. Determine the cost of goods sold and ending inventory amounts for July under the average cost, FIFO cost, and LIFO cost. Round average cost per unit four decimal places, and round all other amounts to the nearest dollar.

2. Explain why cost of goods sold is highest under LIFO. Be specifi c.

3. Prepare SWAT Team Surplus income statement for July. Report gross profi t. Operating expenses totaled €3,000. SWAT Team Surplus uses average costing for inventory. The income tax rate is 32%.