The following information is available concerning Stillwater Inc.:

Stillwater, which uses a perpetual system, sold 1,000 units for $22 each during the year.
Sales occurred on the following dates:
Units
February 12 ................ 150
April 30 ................... 200
July 7 ................. 200
September 6 ............... 300
December 3 ................ 150
Required
1. Calculate ending inventory and cost of goods sold for each of the following three methods:
a. Moving average
b. FIFO
c. LIFO
2. For each of the three methods, compare the results with those of Carter in Exercise 5-21. Which method gives a different answer depending on whether a company uses a periodic or a perpetual inventory system?
3. Assume the use of the perpetual system and an estimated tax rate of 30%. How much more or less (indicate which) will Stillwater pay in taxes by using LIFO instead of FIFO? Explain your answer.

Transcribed Image Text:

Units Unit Cost $10 Beginning inventory Purchases: 200 March 5 June 12 August 23 October 2 300 400 250 150 12 13 15