You are provided with the following information for Pavey Inc. for the month ended October 31,2010.Pavey uses a periodic method for inventory.

Compute ending inventory, prepare income statements,and answer questions using FIFO and LIFO. (SO 2, 3)

(a) Net income FIFO $115,500 LIFO $104,940 (b)(4) $5,440

Unit Cost or Date Description Units Selling Price October 1 Beginning inventory 60 $25 October 9 Purchase 120 26 October 11 Sale 100 35 October 17 Purchase 70 27 October 22 Sale 60 40 October 25 Purchase 80 28 October 29 Sale 110 40

Instructions (a) Calculate (i) ending inventory, (ii) cost of goods sold, (iii) gross profit, and (iv) gross profit rate under each of the following methods. (1) LIFO. (2) FIFO. (3) Average-cost. (b) Compare results for the three cost flow assumptions.