Specialty Steel began January with 45 units of iron inventory that cost $24 each. During January, the company completed the following inventory transactions: 

Requirements 

1. Prepare a perpetual inventory record for the merchandise inventory using the FIFO inventory costing method. 

2. Prepare a perpetual inventory record for the merchandise inventory using the LIFO inventory costing method. 

3. Prepare a perpetual inventory record for the merchandise inventory using the weighted-average inventory costing method. 

4. Determine the company’s cost of goods sold for January using FIFO, LIFO, and weighted-average inventory costing methods. 

5. Compute gross profit for January using FIFO, LIFO, and weighted-average inventory costing methods. 

6. If the business wanted to maximize gross profit, which method would it select?

Transcribed Image Text:

Jan. 3 8 21 30 Sale Purchase Sale Purchase Units 35 70 65 25 Unit Cost Unit Sales Price $51 $32 47 73