2 Inventory Costing Methods—Periodic System The following information is available concerning the…

 

2 Inventory Costing Methods—Periodic System

The following information is available concerning the inventory of Carter Inc.:

During the year, Carter sold 1,000 units. It uses a periodic inventory system.

Required

1. Calculate ending inventory and cost of goods sold for each of the following three methods:

a. Weighted average

b. FIFO

c. LIFO

2. Assume an estimated tax rate of 30%. How much more or less (indicate which) will Carter pay

in taxes by using FIFO instead of LIFO? Explain your answer.