Computing periodic inventory amounts [15—20 min] A Futuristic Electronic Center began D...

Computing periodic inventory amounts [15—20 min]

A Futuristic Electronic Center began December with 91 units of inventory that cost $73 each. During December, the store made the following purchases:

Futuristic uses the periodic inventory system, and the physical count at December 31 indicates that 115 units of inventory are on hand.

Requirements

1. Determine the ending inventory and cost-of-goods-sold amounts for the December financial statements under the average cost, FIFO, and LIFO methods.

2. Sales revenue for December totaled $24,000. Compute Futuristic’s gross profit for December under each method.

3. Which method will result in the lowest income taxes for Futuristic? Why? Which method will result in the highest net income for Futuristic? Why?