Answered>Order 5561

1.Use the following information to calculate the ending inventory cost on December 31 and the cost of goods sold for December under each of three methods: (a) FIFO, (b) LIFO, and (c) Weighted Average. Assume the periodic inventory system is used. (Show your work.)

Dec.  1 Beginning inventory 1,000 units @ $7

         5 Purchased 3,000 units @ $7.10

       18 Purchased 4,000 units @ $7.15

        24 Purchased 2,000 units @ $7.20

        31 Ending inventory 2,500 units

2. Assuming that ending inventory for 20×7 was overstated, indicate whether each of the following will be understated (U), overstated (O), or not affected (N).

_____ 1. Beginning inventory for 20×8

_____ 2. Cost of goods sold for 20×7

_____ 3. Stockholders’ equity at the end of 20×8

_____ 4. Income before income taxes for 20×8

_____ 5. Stockholders’ equity at the end of 20×7

_____ 6. Cost of goods sold for 20×8

_____ 7. Income before income taxes for 20×7