Transcribed Image Text: Exercise 3: Calculating inventory by two methods – periodic system A Best Yet Electronic Centre began December with 140 units of inventory

Transcribed Image Text: Exercise 3: Calculating inventory by two methods – periodic system
A Best Yet Electronic Centre began December with 140 units of inventory that cost $75 each.
During December, the store made the following purchases:
Dec. 03 217 @ $79
12 95 @ $82
18 210 @ $83
24 248 @ $87
The store uses the periodic inventory system, and the physical count at 31 December indicates that
229 units of inventory are on hand.
Requirements:
1. Determine the ending inventory and cost of goods sold amounts for the December financial
statements under the average-cost and FIFO methods. Round average cost per unit to the nearest
cent and all other amounts to the nearest dollar.
2. Sales revenue for December totalled $90,000. Calculate Best Yet’s gross profit for December
under each method.
3. Which method will result in the lowest income taxes for Best Yet? Why? Which method will
result in the highest net profit for Best Yet? Why?

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