Presented below is information related to radios for the Couples Company for the month of July.

Instructions

(a) Assuming that the periodic inventory method is used, compute the inventory cost at July 31 under each of the following cost flow assumptions.
(1) FIFO.
(2) Weighted-average.

(b) Answer the following questions.
(1) Which of the methods used above will yield the highest figure for gross profit for the income statement? Explain why.
(2) Which of the methods used above will yield the highest figure for ending inventory for the statement of financial position? Explain why.

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Units Units Selling Date Transaction Units In Cost Total Sold Price Total July 1 Balance 100 $4.10 $ 410 6 Purchase 800 4.30 3,440 7 Sale 300 $7.00 $2,100 10 Sale 300 7.30 2,190 12 Purchase 400 4.51 1,804 15 Sale 200 7.40 1,480 18 Purchase 300 4.60 1,380 22 Sale 400 7.40 2,960 25 Purchase 500 4.58 2,290 30 Sale 200 7.50 1,500 Totals 2,100 $9,324 1,400 $10,230