Comparing cost of goods sold in perpetual system --- FIFO, LIFO methods
Suppose that JR Tire Store completed the given perpetual inventory transactions for a line of tires:
Beginning inventory ............16 tires@ $ 65
Purchase........................10 tires@ $ 78
Sale........................12 tires@ $ 90
Calculate the cost of goods sold and gross profit by using FIFO. Calculate the cost of goods sold and gross profit by using LIFO. Calculate the cost of goods sold and gross profit by using average-cost. (Round average cost per unit to the closest cent and all other amounts to the closest dollar.) Which method outcomes in the biggest gross profit and explain why?