Question

Required information (The following information applies to the questions displayed below.) Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory (ending inventory December 31, prior year), 2,120 units at $37; purchases, 7,890 units at $39; expenses (excluding income taxes), $193,900; ending inventory per physical count at December 31, current year, 1,610 units; sales, 8,400 units; sales price per unit, $75; and average income tax rate, 30 percent. Required: 1-a. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. 1-b. Prepare income statements under the FIFO, LIFO, and average cost inventory costing methods. Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar amount.) Inventory Costing Method FIFO LIFO Units Average Cost Cost of Goods Sold Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Req1A Req 1B >

Answer 1

Calculate cost of goods sold

	Inventory costing method
Cost of goods sold	Units	FIFO	LIFO	Average cost
Beginning inventory	2120	78440	78440	78440
Purchase	7890	307710	307710	307710
Goods available for sale	10010	386150	386150	386150
Ending inventory	1610	-62790	-59570	62108
Cost of goods sold	8400	323360	326580	324042

Income statement

	FIFO	LIFO	Average cost
Sales (8400*75)	630000	630000	630000
Cost of goods sold	323360	326580	324042
Gross profit	306640	303420	305958
Expenses	193900	193900	193900
Income before tax	112740	109520	112058
Income tax	33822	32856	33617.40
Net income	78918	76664	78440.60