Question

Kegin Company sells many products, y sells many products. Whamo is one of its popular items. Below is an analysis d hory purchases and sales of Whamo for the month of March. Kegin Company uses the periodic Inventory system. Sales Selling Price Unlt Units Purchases Unit Cost $40 Units 3/1 3/3 100 $50 314 $80 Beginning inventory Purchase Sales Purchase Sales Sales Sales Purchase 200 3/10 3M6 3/19 3:25 3/30 $56 $90 40 $80 Instructions Answer the following independent questions and show computations supporting your answers. 1. Assume that the company uses the FIFO method. The value of the ending inventory at December 31 is $ 2 Assume that the company uses the Average-Cost method. The value of the ending inventory on December 31 is $ 3. Assume that the company uses the LIFO method. The value of the ending Inventory on December 31 is $ Determine the difference in the amount of income that the company would have reported if it had used the FIFO method instead of the LIFO method. Would income have been greater or less?

Please help me answer all of the questions.

(Please with clear handwriting and explanations.)

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Answer 1

	Unit	Unit Cost	Total Cost
Beginning inventory	100	40	4000
Purchase 1	60	50	3000
Purchase 2	200	55	11000
Purchase 3	40	60	2400
Total	400		20400

Unit Sold = 70+80+60+40 = 250 Units

a) Value of ending inventory under FIFO = (2400+110*55) = 8450

b) Value of ending inventory under LIFO = (100*40+50*50) = 6500

c) Value of ending inventory under weighted average = 20400/400*150 = 7650

d) Difference in Net income = 8450-6500 = 1950

Under FIFO method income would be higher than LIFO method