Problem 6–7A Thunder Performance Tire began June with 50 units of inventory that cost $132 each. During June, Thunder Performance Tire completed these inventory transactions:

Unit Unit Cost Unit Selling Price Jun. 2 Purchase ........................................ 12 $135 8 Sale ................................................. 27 132 $180 13 Sale ................................................. 23 132 180 Sale ................................................. 3 135 185 17 Purchase ........................................ 24 135 22 Sale ................................................. 31 135 185 29 Purchase ........................................ 24 140 Required 1. The above data are taken from Thunder Performance Tire’s perpetual inventory records.

Which cost method does Thunder Performance Tire use?

2. Compute Thunder Performance Tire’s cost of goods sold for June under the

a. Perpetual inventory system

b. Periodic inventory system 3. Compute gross margin for June.