Periodic Inventory System and Inventory Costing Methods

P$1.$ Midori Company merchandises a single product called Gloss. The following data

represent beginning inventory and purchases of Gloss during the past year: January $1$

inventory, $68,000$ units at $$11\mathrm{.}00$; February purchases, $80,000$ units at $$12\mathrm{.}00$; March

purchases, $160,000$ units at $$12\mathrm{.}40$; May purchases, $120,000$ units at $$12\mathrm{.}60$; July purchases,

$200,000$ units at $$12\mathrm{.}80$; September purchases, $160,000$ units at $$12\mathrm{.}60$; and

November purchases, $60,000$ units at $$13\mathrm{.}00.$ Sales of Gloss totaled $786,000$ units at

$$20\mathrm{.}00$ per unit. Selling and administrative expenses totaled $$5,102,000$ for the year.

Midori uses the periodic inventory system.

REQUIRED

$1.$ Prepare a schedule to compute the cost of goods available for sale.

$2.$ Compute income before income taxes under each of the following inventory cost

flow assumptions: $($a$)$ the average$-$cost method, $($b$)$ the FIFO method, and $($c$)$ the

LIFO method. $($Round cost to the nearest cent.$)$

$3.$ BUSINESS APPLICATION $$ Compute inventory turnover and days$$ inventory