(Compute FIFO, LIFO, Average-CostPeriodic) Presented below is information related to Blowfish radios for the Hootie Company for the month of July.
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Question

(Compute FIFO, LIFO, Average-Cost—Periodic) Presented below is information related to

Blowfish radios for the Hootie Company for the month of July.

Units Unit Units Selling

Date Transaction In Cost Total Sold Price Total

July 1 Balance 100 \$4.10 \$ 410

6 Purchase 800 4.20 3,360

7 Sale 300 \$7.00 \$ 2,100

10 Sale 300 7.30 2,190

12 Purchase 400 4.50 1,800

15 Sale 200 7.40 1,480

18 Purchase 300 4.60 1,380

22 Sale 400 7.40 2,960

25 Purchase 500 4.58 2,290

30 Sale 200 7.50 1,500

Totals 2,100 \$9,240 1,400 \$10,230

Instructions

(a) Assuming that the periodic inventory method is used, compute the inventory cost at July 31 under

each of the following cost flow assumptions.

(1) FIFO.

(2) LIFO.

(3) Weighted-average.

(1) Which of the methods used above will yield the lowest figure for gross profit for the income

statement? Explain why.

(2) Which of the methods used above will yield the lowest figure for ending inventory for the

balance sheet? Explain why.

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