Kingston Company's record of transactions for the month of June was as follows.
Purchases
Sales
June 1 (balance on hand)
2,000 @ $10.00
June 5
500 @ $21.00
2
1,500 @ 10.05
8
1,600 @ 22.00
7
600 @ 10.50
9
700 @ 22.00
15
900 @ 11.00
18
1,800 @ 21.00
20
1,200 @ 11.00
30
700 @ 23.00
27
300 @ 11.10
5,300
6,500
Required:
1. Assuming that periodic inventory records are kept, compute the inventory at June 30 using (1) LIFO and (2)
average cost.
2. Assuming that perpetual inventory records are kept in both units and dollars, determine the inventory at
June 30 using (1) FIFO and (2) LIFO.
3. Compute cost of goods sold assuming periodic inventory procedures and inventory priced at FIFO.
4. In an inflationary period, which inventory method\textendash{}FIFO, LIFO, average cost\textendash{}will show the highest net
income? Explain.
