**Inventory Management and Costing Methods**In this exercise, we explore the perpetual inventory transactions for a line of tires at AB Tire Store. The goal is to compute the cost of goods sold (COGS) and gross profit using different inventory costing methods.### Requirements1. **Compute cost of goods sold and gross profit using the FIFO inventory costing method.**2. **Compute cost of goods sold and gross profit using the LIFO inventory costing method.**3. **Compute cost of goods sold and gross profit using the weighted-average inventory costing method.** - Note: Round the weighted-average cost per unit to the nearest cent and other amounts to the nearest dollar.4. **Determine which method results in the largest gross profit, and explain why.**### More Info- **Dec. 1**: Beginning merchandise inventory - 24 tires at $61 each.- **Dec. 11**: Purchase - 6 tires at $76 each.- **Dec. 23**: Sale - 16 tires at $83 each.- **Dec. 26**: Purchase - 14 tires at $86 each.- **Dec. 29**: Sale - 17 tires at $83 each.This task involves calculating and comparing the results from each inventory costing method to determine which yields the highest gross profit.

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Assume that AB Tire Store completed the following perpetual inventory transactions for a line of tires: (Click the icon to view the transactions.) Requirements 1. 2. 3. Compute cost of goods sold and gross profit using the FIFO inventory costing method. Compute cost of goods sold and gross profit using the LIFO inventory costing method. Compute cost of goods sold and gross profit using the weighted-average inventory costing method. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.) - X More info 4 Dec. 1 Beginning merchandise inventory Dec. 11 Purchase Dec. 23 Sale Dec. 26 Purchase Dec. 29 Sale 24 tires @ $61 each 6 tires @ $76 each 16 tires @ $83 each 14 tires @ $86 each 17 tires @ $83 each

Assume that AB Tire Store completed the following perpetual inventory transactions for a line of tires: (Click the icon to view the transactions.) Requirements 1. 2. 3. Compute cost of goods sold and gross profit using the FIFO inventory costing method. Compute cost of goods sold and gross profit using the LIFO inventory costing method. Compute cost of goods sold and gross profit using the weighted-average inventory costing method. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.) - X More info 4 Dec. 1 Beginning merchandise inventory Dec. 11 Purchase Dec. 23 Sale Dec. 26 Purchase Dec. 29 Sale 24 tires @ $61 each 6 tires @ $76 each 16 tires @ $83 each 14 tires @ $86 each 17 tires @ $83 each

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter20: Accounting For Inventory

Section20.2: Determining The Cost Of Merchandise Inventory

Problem 1WT

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Really not undertsanding LIFO, thank you ahead of time
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