Tillsdale Company uses perpetual inventory costing for inventory Item 407, which it purchases for resale. The company began its operations on January 1 and is in the process of preparing its first financial statements. The inventory ledger and other accounting records were examined, and the following information was gathered pertaining to the first four months of operations: Management has not decided which of the following three inventory costing methods should be selected: (1) Average method (2) First in, first out method (3) Last in, first out method Required: (1) Prepare an inventory record card for Item 407, using each of the methods mentioned. Carry all computations to three decimal places. (2) Prepare a comparative statement showing the effect of each method on gross profit. The sales price is $10 per units.
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