E$7-9($Algo$)$ Analyzing and Interpreting the Financial Statement Effects of FIFO, LIFO, and Weighted Average Cost $[$LO $7-3]$

Scoresby Incorporated tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December $31.$

Transactions Units Unit Cost

a$.$ Inventory, Beginning $4,000$ $ $20$

For the year:

b$.$ Purchase, March $510,00021$

c$.$ Purchase, September $196,00023$

d$.$ Sale, April $15($sold for $$65$ per unit$)4,400$

e$.$ Sale, October $31($sold for $$68$ per unit$)9,000$

f$.$ Operating expenses $($excluding income tax expense$),$ $$610,000$

Required:

$1.$ Calculate the number and cost of goods available for sale.

$2.$ Calculate the number of units in ending inventory.

$3.$ Compute the cost of ending inventory and cost of goods sold under $($a$)$ FIFO, $($b$)$ LIFO, and $($c$)$ weighted average cost.

$4.$ Prepare an income statement that shows the FIFO method, LIFO method and weighted average method.

$6.$ Which inventory costing method minimizes income taxes?