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Shepard Aviation - Inventory Control Methodology

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Please help figuring out requirement 1. See attached.

Prepare a partial income statement through gross profit under the average, FIFO and LIFO methods. Round average cost per unit to four decimal places and all other amounts to the nearest whole dollar.

I know the sales revenue is 126,140 across the board, but can't figure out the cost of goods and gross profit for average cost, FIFO and LIFO.

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Solution Summary

The attached MS Excel spreadsheet contains illustrations and examples of three methods of inventory control: average cost, FIFO, and LIFO.

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Shepard Aviation

The records of Shepard Aviation include the following accounts for inventory of aviation fuel at July 31 of the current year.

Inventory
Aug. 1 Balance 800 units @ $5.00 $4,000
Nov. 5 Purchase 500 units @ $6.80 $3,400
Jan. 24 Purchase 8,000 units @ $7.00 $56,000
Apr. 8 Purchase 700 units @ $8.00 $5,600

Sales Revenue
Jul. 31 9,010 units $126,140

Requirements
1. Prepare a partial income statement through gross profit under the average, FIFO, and LIFO methods.
Round average cost per unit to four decimal places and all other amounts to the nearest whole dollar.

2. Which inventory method would you use to minimize income tax? Explain why this method causes income tax to be the ...

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