Scrappers Supplies tracks the number of units purchased

and sold #2759

Scrappers Supplies tracks the number of units purchased and sold throughout each accounting
period but applies its inventory costing method at the end of each period, as if it uses a periodic
inventory system. Assume its accounting records provided the following information at the end
of the annual accounting period, December 31, 2013.Transactions Units Unit CostBeginning
inventory, January 1, 2013............ 200.......................... $30Transactions during 2013:a.
Purchase on account, March 2.................. 300........................... 32b. Cash sale, April 1 ($46
each)................. (350)c. Purchase on account, June 30................... 250............................36d.
Cash sale, August 1 ($46 each)................ (50)Required:1. Compute the cost of goods available
for sale, cost of ending inventory, and cost of goods sold at December 31, 2013, under each of
the following inventory costing methods:a. Last-in, first-out.b. Weighted average cost.c. First-in,
first-out.d. Specific identification, assuming that the April 1, 2013, sale was selected one-fifth
from the beginning inventory and four-fifths from the purchase of March 2, 2013. Assume that
the sale of August 1, 2013, was selected from the purchase of June 30, 2013.2. Of the four
methods, which will result in the highest gross profit? Which will result in the lowest income
taxes?View Solution:
Scrappers Supplies tracks the number of units purchased and sold

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