Inventory Costing Methods—Periodic System Story Company’s inventory records for the month of… 1 answer below »

Inventory Costing Methods—Periodic System Story Company’s inventory records for the month of… 1 answer below »

Inventory Costing Methods—Periodic System

Story Company’s inventory records for the month of November reveal the following:

Selling and administrative expenses for the month were $16,200. Depreciation expense was

$6,000. Story’s tax rate is 35%.

Required

1. Calculate the cost of goods sold and ending inventory under each of the following three methods

assuming a periodic inventory system: (a) FIFO, (b) LIFO, and (c) weighted average.

2. Calculate the gross profit and net income under each costing assumption.

3. Under which costing method will Story pay the least taxes? Explain your answer.

 

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