ABC Company employs a periodic inventory system and sells its inventory to custo

Question

 ABC Company employs a periodic inventory system and sells its inventory to customers for $25 per unit. ABC Company had the following inventory information available for the month of May: 

 May 1    Beginning inventory 2,000 units @ $10 cost per unit May 8    Sold 1,200 units May 13   Purchased 1,000 units @ $12 cost per unit May 18   Sold 1,000 units May 21   Purchased 1,000 units @ $15 cost per unit May 28   Sold 700 units May 30   Purchased 1,000 units @ $19 cost per unit 

 During May, ABC Company reported operating expenses of $5,000 and had an income tax rate of 30%. 

 Calculate the amount of gross profit earned by ABC Company during May using the weighted average method. Do not use decimals in your answer.

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 I got 34220 for my answer and I don't know where I did wrong, please show me the complete solution to this so I can check step by step, thanks in advance

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 ABC Company employs a periodic inventory system and sells its inventory to customers for $25 per unit. ABC Company had the following inventory information available for the month of May: 

 May 1    Beginning inventory 2,000 units @ $10 cost per unit May 8    Sold 1,200 units May 13   Purchased 1,000 units @ $12 cost per unit May 18   Sold 1,000 units May 21   Purchased 1,000 units @ $15 cost per unit May 28   Sold 700 units May 30   Purchased 1,000 units @ $19 cost per unit 

 During May, ABC Company reported operating expenses of $5,000 and had an income tax rate of 30%. 

 Calculate the amount of net income reported on ABC Company's income statement for May using the LIFO method. Do not use decimals in your answer.

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Explanation / Answer

1)

For weighted average method:

Sales = (1200+1000+700)*25 = 72500

Weighted average cost = [ (2000*10)+(1000*12) + (1000*15)+(1000*19) ] / 5000 = $13.2

COGS = 13.2 * 2900 = $38280

Gross Profit = Sales - COGS

= $34220

2)

For LIFO method:

Sales = 72500

COGS = (1200*10) + (1000*12) + (700*15) = $34500

Gross Profit = $38000

operating expenses = $5000

operating profit = 38000 - 5000 = $33000

Tax expense = 0.30 * 22700 = $9900

net income = 33000 - 9900

= $23100

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