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Question - Jepson Electronic Center began July with 60units of merchandise inventory that cost $68each. During July ,the store made the following purchases:
Jul. 3 40 units@ $72 each
12 50 units@ 90 each
18 30 units@ 92 each
Jepson uses the periodic inventory system, and the physical count at July31 indicates that 90units of merchandise inventory are on hand.
1. Determine the ending merchandise inventory and cost of goods sold amounts for the JulyJuly financial statements using the FIFO, LIFO, and weighted-average inventory costing methods.
2. Sales revenue for July totaled $26,000. Compute Jepson's gross profit for July using each method.
3. Which method will result in the lowest income taxes for Jepson? Why? Which method will result in the highest net income for Jepson? Why?
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