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
(c) Weighted Average. Assume the periodic inventory system is used. (Show your work.)Dec. 1 Beginning inventory 1,000 units @ $75 Purchased 3,000 units @ $7.1018 Purchased 4,000 units @ $7.1524 Purchased 2,000 units @ $7.2031 Ending inventory 2,500 units2.
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 20x8_
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