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Inventory Costing MethodsPeriodic System
The following information is available concerning the inventory of Carter Inc.:
| | Units | Unit Cost |
| Beginning inventory | 202 | $9 |
| Purchases: | | |
| March 5 | 297 | 10 |
| June 12 | 401 | 11 |
| August 23 | 254 | 12 |
| October 2 | 153 | 14 |
During the year, Carter sold 1,015 units. It uses a periodic inventory system.
Required:
1. Calculate ending inventory and cost of goods sold for each of the following three methods:
In your calculations round average unit cost to the nearest cent, and round all other calculations and your final answers to the nearest dollar.
| Cost Flow Assumption | Ending Inventory | Cost of Goods Sold |
| a. Weighted average | $ | $ |
| b. FIFO | $ | $ |
| c. LIFO | $ | $ |
2. Assume an estimated tax rate of 30%. How much more or less (indicate which) will Carter pay in taxes by using FIFO instead of LIFO?
| Difference in taxes under FIFO vs. LIFO | $ |
| Does this amount represent more or less taxes paid using FIFO? | |
3. Assume that Carter prepares its financial statements in accordance with IFRS. Which costing method should it use to pay the least amount of taxes?
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