Prepare Army-Navy Surplus’s income statement for March. Report gross profit. Operating expenses…

Army-Navy Surplus began March with 70 tents that cost $20 each. During the month, Army-

Navy made the following purchases at cost:

March 4

100 tents @ $22

=

$2,200

19

160 tents @ 24

=

3,840

25

40 tents @ 25

=

1,000

Army-Navy Surplus sold 320 tents, and at March 31 the ending inventory consists of 50 tents. The sale price of each tent was $45.

Required

1. Determine the cost of goods sold and ending inventory amounts for March under (1) average cost, (2) FIFO cost, and (3) LIFO cost. Round average cost per unit to 4 decimal places, and round all other amounts to the nearest dollar.

2. Explain why cost of goods sold is highest under LIFO. Be specific.

3. Prepare Army-Navy Surplus’s income statement for March. Report gross profit. Operating expenses totaled $4,000. Army-Navy uses average costing for inventory. The income tax rate is 40%.

"Is this question part of your assignment? We can help"

ORDER NOW