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HWE Homework: Chapter 6 Homework Score: 15.38 of 50 pts 6 of 6 6 complete * P6A-32A (similar to) 25 Century Electronic Center began October with 65 units of merchandise Inventory that cost $82 each. During October, the store made the following purchases: Click the icon to view the purchases) 25th Century uses the periodic inventory system and the physical count at October 31 indicates that 80 units of merchandise inventory are on hand Read the regements Requirement 1. Determine the ending merchandise inventory and cost of goods sold amounts for the October financial statements using the FIFO, LIFO, and weighted average inventory costing methods FIFO UFO W average Ending inventory 7,410 .680 7040 Cost of goods sold 8.270 6.000 6.600 Requirement 2. les revenue for October told 529.000. Comoute 25 Century's gross profit for October using each method UFO Cost We verage Gross profit 5500 16 320 15.500 Enter wy number in the ad d s and then click Check Answer Car A

Answer 1

	Units (a)	Rate (b)	Amount (a*b)
Beginning inventory	65	$82	$5,330
Purchases:
Oct. 3	25	$90	$2,250
Oct. 12	30	$90	$2,700
Oct. 18	35	$96	$3,360
Total Units Available	155
Less: Ending Inventory	80
Units sold	75
1)
FIFO:
Beginning Inventory	65	$82	$5,330
Purchases - Oct. 3 (75 - 65)	10	$90	$900
Cost of Goods Sold under FIFO	75		$6,230
Oct. 3 (25 - 10)	15	$90	$1,350
Oct. 12	30	$90	$2,700
Oct. 18	35	$96	$3,360
Ending Inventory under FIFO	80		$7,410
LIFO:
Purchases - Oct. 18	35	$96	$3,360
Purchases - Oct. 12	30	$90	$2,700
Purchases - Oct. 3 (75 - 35 - 30)	10	$90	$900
Cost of Goods Sold under LIFO	75		$6,960
Purchases - Oct. 3 (25 - 10)	15	$90	$1,350
Beginning Inventory	65	$82	$5,330
Ending Inventory under LIFO	80		$6,680
Weighted Average Method:
Beginning inventory	65	$82	$5,330
Purchases:
Oct. 3	25	$90	$2,250
Oct. 12	30	$90	$2,700
Oct. 18	35	$96	$3,360
Total Units Available	155		$13,640
Weighted average cost per unit ($13,640/155 units)		$88
Cost of Goods Sold under weighted average method	75	$88	$6,600
Ending inventory under weighted average method	80	$88	$7,040
2)	FIFO	LIFO	Weighted Average Method
Sales Revenue	$23,000	$23,000	$23,000
Less: Cost of Goods Sold	($6,230)	($6,960)	($6,600)
Gross Profit	$16,770	$16,040	$16,400
3)
LIFO method will result the lowest income taxed because the gross profit is less and taxes are calculated based on the income.
FIFO method will result the highest income taxes because the gross profit is more and taxes are calculated based on the income.