Question

Martinez Co. reported the following current-year data for its only product. The company uses a periodic inventory system, and its ending inventory consists of 150 units—50 from each of the last three purchases.


Jan.	1	Beginning inventory	96	units	@ $2.00	=	$	192
Mar.	7	Purchase	220	units	@ $2.25	=		495
July	28	Purchase	544	units	@ $2.50	=		1,360
Oct.	3	Purchase	480	units	@ $2.80	=		1,344
Dec.	19	Purchase	160	units	@ $2.90	=		464

		Totals	1,500	units			$	3,855

Determine the cost assigned to ending inventory and to cost of goods sold for the following. (Do not round intermediate calculations and round your answers to 2 decimal places.)

Ending inventory	Cost of goods sold
(a)	Specific identification
(b)	Weighted average
(c)	FIFO
(d)	LIFO

+

Which method yields the highest net income?

Weighted average

LIFO

FIFO

Specific identification

Answer 1

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