(APPENDIX 6B) INVENTORY COSTING METHODS: PERIODIC INVENTORY SYSTEM Jackson Company had 200 units in beginning inventory at a cost of $24 each. Jackson’s 2009 purchases were:

Date Purchases Feb. 21 6,200 units at $28 each July 15 5,500 units at $32 each Sept. 30 8,100 units at $34 each Jackson uses a periodic inventory system and sold 19,600 units at $45 each during 2009.

Required:

. Calculate the cost of ending inventory and the cost of goods sold using the FIFO, LIFO and average cost methods. (Use four decimal places for per unit calculations and round all other numbers to the nearest dollar.)

. Prepare income statements through gross margin using each of the costing methods in (1). What is the effect of each method on income?

Exercise