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##### Prepare a partial income statement through gross profit under the average, FIFO, and LIFO methods

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The records of Lovett Aviation include the following accounts for inventory of aviation fuel at July 31 of the current year.;Inventory;Aug 1 Balance 700 units @\$6.00 \$4200;Nov 5 Balance 400 units @ \$6.50 2600;Jan 24 Balance 6500 units @\$7.20 46,800;Apr 8 Balance 400 units @\$ 8.00 3200;Sales Revenue;Jul 31 7020 units \$100,386;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 lowest. Use the (a). average-cost (b).FIFO (c). LIFO method to minimize income tax because cost of goods sold is highest (gross is lowest) under (a). average-cost (b). FIFO (c). LIFO when inventory cost are (a) falling (b). rising (c). static.

Paper#20319 | Written in 18-Jul-2015

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