Bitten Companys inventory records show 600 units on hand on October 1 with a unit cost of $5 each The following transactions occurred during the month of October All expenses other than cost of goods sold amount to $3,000 for the month The company uses an estimated tax rate of 30 to accrue monthly ...

Lets first determine the ending inventory and cost of goods sold COGS for each of the three inventory systems weighted average FIFO and LIFO in order ...

Bitten Companys inventory records show 600 units on hand on October 1 with a unit cost of

Question:

Bitten Company’s inventory records show 600 units on hand on October 1 with a unit cost of $5 each. The following transactions occurred during the month of October:

Date October 4 8 9 18 20 29 Unit Purchases 800@ $5.40 700 @ $5.76 800@ $5.90 Unit Sales 500 @ $10.00 700 @

All expenses other than cost of goods sold amount to $3,000 for the month. The company uses an estimated tax rate of 30% to accrue monthly income taxes.

Required
1. Prepare a chart comparing cost of goods sold and ending inventory using the periodic system and the following costing methods:

Weighted average FIFO LIFO Cost of Goods Sold Ending Inventory Total

2. What does the Total column represent?
3. Prepare income statements for each of the three methods.
4. Will the company pay more or less tax if it uses FIFOrather than LIFO?How much more or less?

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