story company s inventory records for the month of november reve 280159

Story Company’s inventory records for the month of November reveal the following:

Inventory, November 1 300 units @ $27.00

November 4, purchase 375 units @ $26.50

November 7, sale450 units @ $63.00

November 13, purchase 330 units @ $26.00

November 18, purchase 225 units @ $25.40

November 22, sale 570 units @ $63.75

November 24, purchase 300 units @ $25.00

November 28, sale 165 units @ $64.50

Selling and administrative expenses for the month were $16,200. Depreciation expense was $6,000. Story’s tax rate is 35%.

Required

1. Calculate the cost of goods sold and ending inventory under each of the following three methods assuming a periodic inventory system:

(a) FIFO,

(b) LIFO, and

(c) Weighted average.

2. Calculate the gross profit and net income under each costing assumption.

3. Under which costing method will Story pay the least taxes? Explain your answer.