Chapter 6, Problem 6.29AP

Accounting for inventory using the perpetual inventory system- FIFO, LIFO, and weighted-average, and comparing FIFO, LIFO, and weighted-average

Iron Man began August with 65 units of iron inventory that cost $30 each. During August, the company completed the following inventory transactions:

Requirements

1. 1. Prepare a perpetual inventory record for the merchandise inventory using the FIFO inventory costing method.
2. 2. Prepare a perpetual inventory record for the merchandise inventory using the LIFO inventory costing method.
3. 3. Prepare a perpetual inventory record for the merchandise inventory using the weighted-average inventor y costing method.
4. 4. Determine the company’s cost of goods sold for August using FIFO, LIFO, and weighted -average inventory costing methods.
5. 5. Compute gross profit for August using FIFO, LIFO, and weighted –average inventory costing methods.
6. 6. If the business wanted to maximize gross profit, which method would it select?