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In: Accounting

Right Now Electronic Center began July with 65 units of merchandise inventory that cost $ 82...

Right Now Electronic Center began July with 65 units of merchandise inventory that cost $ 82 each. During July​, the store made the following​ purchases:

Jul. 3 25 units @ $90 each

Jul. 12 30 units @ $90 each

Jul. 18 35 units @ $96 each

Right Now uses the periodic inventory​ system, and the physical count at July 31 indicates that 80 units of merchandise inventory are on hand.

Requirement 1. Determine the ending merchandise inventory and cost of goods sold amounts for the July financial statements using the​ FIFO, LIFO, and​ weighted-average inventory costing methods.

Requirement 2: Sales revenue for July totaled $ 28,000. Compute Right Now's gross profit for July using each method.

Requirement 3: Which method will result in the lowest income taxes for Right Now​? ​Why? Which method will result in the highest net income for Right Now​? ​Why?

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Expert Solution

ekkarill92 answered 1 year ago
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