The following data are available for Sellco for the fiscal year ended on January 31, 2011:
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,600 units
Beginning inventory . . . . . . . . . . . . . . . . . . . . 500 units @ $4
Purchases, in chronological order . . . . . . . . . . 600 units @ $5
800 units @ $6
400 units @ $8
Required:
a. Calculate cost of goods sold and ending inventory under the following cost-flow assumptions (using a periodic inventory system):
1. FIFO.
2. LIFO.
3. Weighted average. Round the unit cost answer to two decimal places and ending inventory to the nearest $10.
b. Assume that net income using the weighted-average cost-flow assumption is $58,000. Calculate net income under FIFO and LIFO.