Spotter Corporation reported the following for June in its periodic inventory re

Question

Spotter Corporation reported the following for June in its periodic inventory records Date Description Units Unit Cost Total Cost June 1 Beginning 11 Purchase 24 Purchase 30 Ending 16 52 27 31 $ 9.40 150.40 540.80 334.80 10.40 12.40 Required 1. Calculate the cost of ending inventory and the cost of goods sold under the (a) FIFO, (b) LIFO, and (c) weighted average cost methods. (Round your intermediate calculations and final answers to 2 decimal places.) Cost of Ending Cost of Goods Sold Inven FIFO LIFO Weighted Average Cost 2. Which of the three methods will lead to reporting the highest net income? FIFO O LIFO Weighted Average Cost

Explanation / Answer

Calculate cost of ending inventory and cost of goods sold :

2) FIFO will lead to reporting the highest net income.

Cost of ending inventory Cost of goods sold FIFO (27*12.40+4*10.40)=376.40 1026-376.40=649.60 LIFO (16*9.40+15*10.40)=306.40 1026-306.40 = 719.60 Weighted average cost (1026/95*31) = 334.80 1026-334.80=691.20

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