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 540 units-180 from each of the last three purchases.
Jan. 1
|
Beginning inventory
|
280 units
|
@$5.20 = $ 1,456
|
Mar. 7
|
Purchase
|
600 units
|
@$6.25 = 3,750
|
July 28
|
Purchase
|
1,240 units
|
@$5.70 = 7,068
|
Oct. 3
|
Purchase
|
1,120 units
|
@$6.00 = 6,720
|
Dec. 19
|
Purchase
|
640 units
|
@$6.10 = 3,904
|
|
Totals
|
3,880 units
|
$22,898
|
a. Determine the cost assigned to ending inventory and to cost of goods sold for the following.
- Specific identification
- Weighted average
- FIFO
- LIFO
b. Which method yields the highest net income?
- Specific identification
- LIFO
- Weighted average
- FIFO