PB$7-1($Algo$)$ Analyzing the Effects of Four Alternative Inventory Methods in a Periodic Inventory System $[$LO $7-3]$

Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January $31.$ The inventory$$s selling price is $$13$ per unit.

TransactionsUnit CostUnitsTotal CostInventory, January $1$$ $4\mathrm{.}50310$$ $1,395$Sale, January $10(260)$Purchase$,$ January $125\mathrm{.}003601,800$Sale, January $17(100)$Purchase$,$ January $266\mathrm{.}0080480$

Required:

$1.$ Compute the amount of goods available for sale, ending inventory, and cost of goods sold at January $31$ under each of the following inventory costing methods:

Weighted average cost.First$-$in$,$ first$-$out.Last$-$in$,$ first$-$out.Specific identification, assuming that the January $10$ sale was from the beginning inventory and the January $17$ sale was from the January $12$ purchase.

$2-$a$.$ Of the four methods, which will result in the highest gross profit?

$2-$b$.$ Of the four methods, which will result in the lowest income taxes? Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January $31.$ The inventory's selling price is $\backslash (\backslash$$ $13\backslash )$ per unit.

Required:

$1.$ Compute the amount of goods available for sale, ending inventory, and cost of goods sold at January $31$ under each of the following inventory costing methods:

a$.$ Weighted average cost.

b$.$ First$-$in$,$ first$-$out.

c$.$ Last$-$in$,$ first$-$out.

d$.$ Specific identification, assuming that the January $10$ sale was from the beginning inventory and the January $17$ sale was from the January $12$ purchase.

$2-$a$.$ Of the four methods, which will result in the highest gross profit?

$2-$b$.$ Of the four methods, which will result in the lowest income taxes? Complete this question by entering your answers in the tabs below.

Req $1$

Req $2$A

Compute the amount of goods available for sale, ending inventory, and cost of goods sold at January $31$ under each of the following inventory costing methods:

a$.$ Weighted average cost.

b$.$ First$-$in$,$ first$-$out.

c$.$ Last$-$in$,$ first$-$out.

d$.$ Specific identification, assuming that the January $10$ sale was from the beginning inventory and the January $17$ sale was from the January $12$ purchase.

Note: Round your intermediate calculations to $2$ decimal places and final answers to the nearest dollar amount.

Show less $4$

$\backslash$begin$\{$tabular$\}\{|$l$|$lr$|$lr$|$rr$|\}$

$\backslash$hline & $\backslash$begin$\{$tabular$\}\{$c$\}$

Amount of Goods $\backslash \backslash$

Available for Sale

$\backslash$end$\{$tabular$\}$ & Ending Inventory & $\backslash$multicolumn$\{2\}\{|$c$|\}\{\backslash$begin$\{$tabular$\}\{$c$\}$

Cost of Goods $\backslash \backslash$

Sold

$\backslash$end$\{$tabular$\}\}\backslash \backslash$

$\backslash$hline a$.$ Weighted average cost & $\backslash (\backslash$$ $\backslash )$ & $3,675$ & $\backslash (\backslash$$ $\backslash )$ & $1,911$ & $\backslash (\backslash$$ $\backslash )$ & $1,764\backslash \backslash$

$\backslash$hline b$.$ First$-$in$,$ first$-$out & $\backslash (\backslash$$ $\backslash )$ & $3,675$ & $\backslash (\backslash$$ $\backslash )$ & $1,500$ & $\backslash (\backslash$$ $\backslash )$ & $1,225\backslash \backslash$

$\backslash$hline c$.$ Last$-$in$,$ first$-$out: & $\backslash (\backslash$$ $\backslash )$ & $3,675$ & $\backslash (\backslash$$ $\backslash )$ & $705$ & $\backslash (\backslash$$ $\backslash )$ & $1,800\backslash \backslash$

$\backslash$hline d$.$ Specific identification & $\backslash (\backslash$$ $\backslash )$ & $3,675$ & $\backslash (\backslash$$ $\backslash )$ & $1,780$ & $\backslash (\backslash$$ $\backslash )$ & $1,670\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$