Compute FIFO, LIFO, Average-CostPeriodic)

(LO 3) Presented below is information related to Blowfish radios for the Hootie Company for the month of July.

Date	Transaction	Units In	Unit Cost	Total	Units Sold	Selling Price	Total
July1	Balance	100	$4.10	$410
6	Purchase	800	4.20	3,360
7	Sale				300	$7.00	$2,100
10	Sale				300	7.30	2,190
12	Purchase	400	4.50	1,800
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		$9,240	1,400		$10,230

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.LIFO.

3.Weighted-average.

(b) Answer the following questions.

1.Which of the methods used above will yield the lowest figure for gross profit for the income statement? Explain why.

2.Which of the methods used above will yield the lowest figure for ending inventory for the balance sheet? Explain why.