Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January The inventorys selling price is $ per unit.
Transactions Unit Cost Units Total Cost
Inventory, January $ $
Sale, January
Purchase, January
Sale, January
Purchase, January
Required:
Compute the amount of goods available for sale, ending inventory, and cost of goods sold at January under each of the following inventory costing methods:
a Weighted average cost.
b Firstin firstout.
c Lastin firstout.
d Specific identification, assuming that the January sale was from the beginning inventory and the January sale was from the January purchase.
a Of the four methods, which will result in the highest gross profit?
b Of the four methods, which will result in the lowest income taxes?
