Posted by **Angie** on Sunday, May 2, 2010 at 5:36pm.

Jones Company had 100 units in beginning inventory at a total cost of $10,000.The company

purchased 200 units at a total cost of $26,000. At the end of the year, Jones had 80 units in

ending inventory.

Instructions

(a) Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO, (2)

LIFO, and (3) average-cost.

(b) Which cost flow method would result in the highest net income?

(c) Which cost flow method would result in inventories approximating current cost in the balance

sheet?

(d) Which cost flow method would result in Jones paying the least taxes in the first year?

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