What value would Richmond report on the Balance sheet at August 31, 2012, for inventory

QUESTION 1.

Beginning inventory........24  tires @ $61

Purchase.........6  tires @ $76

Sale.......17  tires @ $105

Requirements

1. Compute cost of goods sold and gross profit under FIFO.

2. Compute cost of goods sold and gross profits using LIFO.

3. Compute cost of goods sold and gross profits using average cost.

4. Which method results in the largest gross profit and why?

REQUIREMENT 1, 2,  and 3

REQUIREMENT 4

 Which method results in the largest gross profit and why?

The __________ method results in the largest gross profit because during times of __________ inventory prices, this method will produce the __________ cost of goods sold.

QUESTION 2.

Richmond Sporting Goods, which uses the FIFO  method, has the following  account balance at August 31, 2012, prior to releasing  the financial statement for the year.

              Inventory  _                           Cost of goods sold__          Sales revenue________

             Credit         Debit                    Credit           Debit                 Credit                Debit

BAL      14500                           BAL     67000                              BAL                          117000

REQUIREMENT 1

 Prepare any adjusting journal entry required from the given information.

Journal Entry___________________________

Date                            Account                                Debit                       Credit

August 31                  

REQUIRMENT 2

What value would Richmond report on the Balance sheet at August 31, 2012, for inventory?

According to the ____________ rule, Richmond Sporting Goods should report inventory on the August 31 balance sheet at ______________.

QUESTION 3.

REQUIREMENT 1

Supply the missing amounts for each of the following companies

Company    Net sales    Beg. Invent      Net Purch    End Invent    Cost of goods sold    Gross Profit

Red             $103000        $190000           $64000         $17000                                               $37000

Yellow                                $26000             $93000                                   $92000                     $41000

Orange       $91000                                     $52000        $25000             $61000

Green         $86000          $9000                                      $8000                                                 $45000

REQUIREMENT 2

Prepare the income statement for Red company, which uses the periodic inventory system. Include a complete heading  and show the full computation of cost of goods sold. Red's operating  expenses for the year were $12000