Task: The following information is available concerning the inventory of Carter Inc.:
Units Unit Cost
Beginning Inventory 200 $10
Purchases:
March 5 300 11
June12 400 12
August 23 250 13
October 2 150 15
During the year, Carter sold 1,000 units. It uses a periodic inventory system.
Required
Question 1. Calculate ending inventory and cost of good sold for each of the following three methods:
a. Weighted average
b. FIFO
c. LIFO
Question 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.