Repeat Problem 5-10A using the perpetual system. Data From Problem 5-10A: Stellar Inc.s inventory records show 300

Question:

Repeat Problem 5-10A using the perpetual system.

Data From Problem 5-10A:

Stellar Inc.’s inventory records show 300 units on hand on November 1 with a unit cost of $4 each. The following transactions occurred during the month of November:

Date November 4 8 9 18 20 29 Unit Purchases 500 @ $4.50 700 @ $4.75 600 @ $5.00 Unit Sales 200 @ $9.00 500 @

All expenses other than cost of goods sold amount to $2,000 for the month. The company uses an estimated tax rate of 25% 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 FIFO rather than LIFO? How much more or less?

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