1. Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory (ending inventory December 31, prior year), 2,090 units at $36; purchases, 7,860 units at $38; expenses (excluding income taxes), $192,500; ending inventory per physical count at December 31, current year, 1,660 units; sales, 8,290 units; sales price per unit, $76; and average income tax rate, 32 percent.

How do you find the Average cost (inventory costing method):

Beginning Inventory

Purchases

Goods Available for sale

Ending Inventory

Cost of good sold

2. Pacific Company sells electronic test equipment that it acquires from a foreign source. During the year, the inventory records reflected the following:

	Units	Unit Cost				Total Cost
Beginning inventory	23		$	11,590			$	266,570
Purchases	42			10,090				423,780
Sales (49 units at $24,690 each)

Inventory is valued at cost using the LIFO inventory method.

The management, for various reasons, is considering buying 23 additional units before December 31 year-end at $9,590 each. Restate the income statement (and ending inventory), assuming that this purchase is made on December 31. Assume the LIFO method and the periodic inventory system are used by the company.

Pacific Company

Income Statement

What is the Sales revenue, cost of goods sold, gross profit, expenses is 298,000, and ending inventory?