Presented below is information related to\nBlowfish radios for the Hootie Company for the month of July.\nUnits Unit Units Selling\nDate Transaction In C
Presented below is information related to
\r\nBlowfish radios for the Hootie Company for the month of July.
\r\nUnits Unit Units Selling
\r\nDate Transaction In Cost Total Sold Price Total
\r\nJuly 1 Balance 100 $4.10 $ 410
\r\n6 Purchase 800 4.20 3,360
\r\n7 Sale 300 $7.00 $ 2,100
\r\n10 Sale 300 7.30 2,190
\r\n12 Purchase 400 4.50 1,800
\r\n15 Sale 200 7.40 1,480
\r\n18 Purchase 300 4.60 1,380
\r\n22 Sale 400 7.40 2,960
\r\n25 Purchase 500 4.58 2,290
\r\n30 Sale 200 7.50 1,500
\r\nTotals 2,100 $9,240 1,400 $10,230
\r\nInstructions
\r\n(a) Assuming that the periodic inventory method is used, compute the inventory cost at July 31 under each of the following cost flow assumptions.
\r\n(1) FIFO.
\r\n(2) LIFO.
\r\n(3) Weighted-average.
\r\n(b) Answer the following questions.
\r\n(1) Which of the methods used above will yield the lowest figure for gross profit for the income statement? Explain why.
\r\n(2) Which of the methods used above will yield the lowest figure for ending inventory for the balance sheet? Explain why.