**Inventory Costing Methods** **Date | Item | Quantity | Cost Per Unit | Total** 1. 1-May Beginning Inventory | 30 | $17.00 | $510.00 2. 8-May Purchase | 28 | $18.00 | $504.00 3. 15-May Purchase | 42 | $19.00 | $798.00 4. 22-May Purchase | 10 | $22.00 | $220.00 5. 29-May Purchase | 50 | $26.00 | $1,300.00 **Sales** - Sold 135 Units @ $37 each --- **FIFO (First-In, First-Out)** | Date | Item | Quantity | Cost Per Unit | Total | |------|------|----------|---------------|-------| | | | | | | **Ending Inventory** --- **Income Statement** - **Sales** - **Cost of Goods Sold** - **Gross Profit** - **Operating Expenses** $1,400.00 - **Net Income** - **Gross Profit %** --- **LIFO (Last-In, First-Out)** | Date | Item | Quantity | Cost Per Unit | Total | |------|------|----------|---------------|-------| | | | | | | The image shows a spreadsheet designed to track inventory and calculate costs using two different accounting methods: LIFO (Last In, First Out) and Average Cost. Below is a detailed transcription and explanation: ### LIFO Section - **Columns:** - Date - Item - Quantity - Cost Per Unit - Total - **Ending Inventory:** This is where the unsold inventory is recorded based on the LIFO method. - **Income Statement (LIFO):** - **Sales:** The revenue earned from sold goods. - **Cost of Goods Sold:** Deducted from sales to determine gross profit. - **Gross Profit:** Revenue minus the cost of goods sold. - **Operating Expenses:** Shown as $1,400.00. - **Net Income:** The final profit considering all expenses. - **Gross Profit %:** The percentage of revenue remaining after costs are subtracted. ### Average Cost Section - **Average Cost Per Unit:** This is used to evaluate inventory cost under the Average Cost method. - **Cost of Goods Sold and Ending Inventory:** Calculated based on the average cost per unit. - **Income Statement (Average Cost):** - **Sales:** Revenue from sales. - **Cost of Goods Sold:** Based on average cost. - **Gross Profit:** Sales minus the cost of goods sold. - **Operating Expenses:** Also $1,400.00. - **Net Income:** Profit after all costs. - **Gross Profit %:** Indicating the profitability after costs. ### Explanation of the Income Statements Both sections contain an income statement with a highlighted area showing key figures. Operating expenses are marked as $1,400.00 for both methods, showing the impact on gross profit. Each method has a blank field for Sales, Cost of Goods Sold, Gross Profit, Net Income, and Gross Profit % to be filled in based on actual or projected financial data. This spreadsheet provides an organized way to compare financial outcomes based on different inventory costing methods, aiding in financial analysis and decision-making.