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The following schedule summarizes the inventory purchases and sales of Brooks Street Enterprises during January 2009;
(a) Determine Brooks Street's ending inventory, cost of goods sold, and gross profit for January 2009, assuming the company uses a perpetual inventory system and the following inventory costing methods: (1) FIFO, (2) LIFO, and (3) moving-average.
(b) Which of the three inventory costing methods yields the most impressive financial results for Brooks Street? Explain.
(c) What factors should a company consider when choosing an inventory costing method? Should one of these factors be the inventory costing method preferred by the decision makers who will be using the company's financial statements?
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