The records of armstrong aviation supply inc include the, Ask an Expert

Accounting

The records of Armstrong Aviation Supply Inc. include the following accounts for inventory of aviation fuel at December 31, 2011:

Inventory

Jan. 1 Balance 700 units @ $7.00 4,900
Mar. 6 Purchase 300 units @ 7.05 2,115
June 22 Purchase 8,400 units @ 7.50 63,000
Oct. 4 Purchase 500 units @ 8.50 4,250

Sales Revenue

Dec. 31 9,000 units 127,800

Required

1. Prepare a partial income statement through gross profit under the weighted-average-cost and FIFO methods. Round weighted-average cost per unit to four decimal places and all other amounts to the nearest dollar.

2. Which inventory method would you use to minimize income tax? Explain why this method causes income tax to be the lowest.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9798686

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