The following information is available concerning Stillwater Inc.: Stillwater, which uses a…
The following information is available concerning Stillwater Inc.:
Stillwater, which uses a perpetual system, sold 1,000 units for $22 each during the year. Sales occurred on the following dates:
Required 1. Calculate ending inventory and cost of goods sold for each of the following three methods: a. Moving average b. FIFO c. LIFO 2. For each of the three methods, compare the results with those of Carter in Exercise 5-25. Which method gives a different answer depending on whether a company uses a periodic or a perpetual inventory system? 3. Assume the use of the perpetual system and an estimated tax rate of 30%. How much more or less (indicate which) will Stillwater pay in taxes by using LIFO instead of FIFO? Explain your answer.