Ainslee Electronic Center began October with 90 units of merchandise inventory that cost $70 each. During October, the store made the following purchases: 

Ainslee Electronic Center uses the periodic inventory system, and the physical count at October 31 indicates that 110 units of merchandise inventory are on hand. 

Requirements 

1. Determine the ending merchandise inventory and cost of goods sold amounts for the October financial statements using the FIFO, LIFO, and weighted-average inventory costing methods. 

2. Net sales revenue for October totaled $26,000. Compute Ainslee Electronic Center’s gross profit for October using each method. 

3. Which method will result in the lowest income taxes for Ainslee Electronic Center? Why? Which method will result in the highest net income for Ainslee Electronic Center? Why?

Transcribed Image Text:

Oct. 3 12 18 20 units @ $ 75 each 40 units @ $ 78 each 60 units @ $ 84 each