Purchases and Sales

2005 2006 2007

Beginning Balance 1,840 @20.00 1,020 1,040

Purchases 2,000 $ 41,750 3,100 $ 67,750 3,100 $ 70,975

600 @20.25 12,150 700 @21.50 15,050 1,000 @22.50 22,500
800 @21.00 16,800 700 @21.50 15,050 700 @22.75 15,925
400 @21.25 8,500 700 @22.00 15,400 700 @23.00 16,100
200 @21.50 4,300 1,000 @22.25 22,250 700 @23.50 16,450

Sales 2,820 @34.00 3,080 @35.75 2,950 @35.75

Ending Inventory 1,020 1,040 1,190

FIFO
2005 2006 2007
Units Rate Cost Units Rate Cost Units Rate Cost
COGS 2,820 $ 56,930 3,080 $ 66,240 2,950 $ 66,385
Ending Inventory 1,020 $ 21,620 1,040 $ 23,130 1,190 $ 27,720

COGS 2,820 56,930 3,080 66,240 2,950 66,385

1,840 @20.00 36,800 420 @21.00 8,820 40 @22.00 880
600 @20.25 12,150 400 @21.25 8,500 1000 @22.25 22,250
380 @21.00 7,980 200 @21.50 4,300 1,000 @22.50 22,500
700 @21.50 15,050 700 @22.75 15,925
700 @21.50 15,050 210 @23.00 4,830
660 @22.00 14,520

Ending Inventory 1,020 $ 21,620 1,040 $ 23,130 1,190 $ 27,720

420 @21.00 8,820 40 @22.00 880 490 @23.00 11,270
400 @21.25 8,500 1,000 @22.25 22,250 700 @23.50 16,450
200 @21.50 4,300

Average Cost
2005 2006 2007
 Units Rate Cost Units Rate Cost Units Rate Cost
Beginning Inventory 1,840 @20.00 $ 36,800 1,020 $ 20,865 1,040 $ 22,369
Purchases 2,000 $ 41,750 3,100 $ 67,750 3,100 $ 70,975
Available for Sale 3,840 @20.46 $ 78,550 4,120 @21.51 $ 88,615 4,140 @22.55 $ 93,344
COGS 2,820 @20.46 $ 57,685 3,080 @21.51 $ 66,246 2,950 @22.55 $ 66,513
Ending Inventory 1,020 @20.46 $ 20,865 1,040 @21.51 $ 22,369 1,190 @22.55 $ 26,831

Net Income
2005 2006 2007
FIFO Avg Cost Difference FIFO Avg Cost Difference FIFO Avg Cost Difference
Sales $ 95,880 $ 95,880 $ - $ 110,110 $ 110,110 $ - $ 105,463 $ 105,463 $ -
COGS $ 56,930 $ 57,685 $ 755 $ 66,240 $ 66,246 $ 6 $ 66,385 $ 66,513 $ 128
Gross Margin $ 38,950 $ 38,195 $ (755) $ 43,870 $ 43,864 $ (6) $ 39,078 $ 38,949 $ (128)
Tax Expense $ 15,580 $ 15,278 $ (302) $ 17,548 $ 17,546 $ (2) $ 15,631 $ 15,580 $ (51)
Net Income $ 23,370 $ 22,917 $ (453) $ 26,322 $ 26,318 $ (4) $ 23,447 $ 23,370 $ (77)

Total Tax Saving $ (356) However, reported net income is also lower
Purchases and Sales
2005 2006 2007
Beginning Balance 1,840 @20.00 $ 36,800

Purchases 2,000 $ 41,750 3,100 $ 67,750 3,100 $ 70,975

600 @20.25 12,150 700 @21.50 15,050 1,000 @22.50 22,500
800 @21.00 16,800 700 @21.50 15,050 700 @22.75 15,925
400 @21.25 8,500 700 @22.00 15,400 700 @23.00 16,100
200 @21.50 4,300 1,000 @22.25 22,250 700 @23.50 16,450

Sales 2,820 @34.00 3,080 @35.75 2,950 @35.75

FIFO
2005 2006 2007
Units Rate Cost Units Rate Cost Units Rate Cost
Beginning Inventory 1,840 @20.00 $ 36,800 1,020 $ 21,620 1,040 $ 23,130
Purchases 2,000 $ 41,750 3,100 $ 67,750 3,100 $ 70,975
Available for Sale 3,840 $ 78,550 4,120 $ 89,370 4,140 $ 94,105
Sachin
COGS 2,820 Sachin $ 56,930 Mathur:
3,080 $ 66,240 2,950 $ 66,385
Ending Inventory 1,020 Mathur: $ 21,620 Balancing 1,040 $ 23,130 1,190 $ 27,720
Balancing figure
figure
Ending Inventory 1,020 $ 21,620 1,040 $ 23,130 1,190 $ 27,720
420 @21.00 8,820 40 @22.00 880 490 @23.00 11,270
400 @21.25 8,500 1,000 @22.25 22,250 700 @23.50 16,450
200 @21.50 4,300

Average Cost
2005 2006 2007
Units Rate Cost Units Rate Cost Units Rate Cost
Beginning Inventory 1,840 @20.00 $ 36,800 1,020 $ 20,865 1,040 $ 22,369
Purchases 2,000 $ 41,750 3,100 $ 67,750 3,100 $ 70,975
Sachin
Available for Sale 3,840 @20.46 $ 78,550 Mathur: 4,120 @21.51 $ 88,615 4,140 @22.55 $ 93,344
COGS 2,820 @20.46 $ 57,685 Calculated 3,080 @21.51 $ 66,246 2,950 @22.55 $ 66,513
Ending Inventory 1,020 @20.46 $ 20,865 1,040 @21.51 $ 22,369 1,190 @22.55 $ 26,831
Net Income
2005 2006 2007
FIFO Avg Cost Difference FIFO Avg Cost Difference FIFO Avg Cost Difference
Sales $ 95,880 $ 95,880 $ - $ 110,110 $ 110,110 $ - $ 105,463 $ 105,463 $ -
COGS $ 56,930 $ 57,685 $ 755 $ 66,240 $ 66,246 $ 6 $ 66,385 $ 66,513 $ 128
Gross Margin $ 38,950 $ 38,195 $ (755) $ 43,870 $ 43,864 $ (6) $ 39,078 $ 38,949 $ (128)
Tax Expense $ 15,580 $ 15,278 $ (302) $ 17,548 $ 17,546 $ (2) $ 15,631 $ 15,580 $ (51)
Net Income $ 23,370 $ 22,917 $ (453) $ 26,322 $ 26,318 $ (4) $ 23,447 $ 23,370 $ (77)

Total Tax Saving $ (356) However, reported net income is also lower
Purchases and Sales
2005 2006 2007 2008
Purchases 2,000 $ 41,750 3,100 $ 67,750 3,100 $ 70,975 1,910 @24.00 $ 45,840
600 @20.25 12,150 700 @21.50 15,050 1,000 @22.50 22,500
800 @21.00 16,800 700 @21.50 15,050 700 @22.75 15,925
400 @21.25 8,500 700 @22.00 15,400 700 @23.00 16,100
200 @21.50 4,300 1,000 @22.25 22,250 700 @23.50 16,450

Sales 2,820 @34.00 $ 95,880 3,080 @35.75 $ 110,110 2,950 @35.75 $ 105,463 2,700 @35.75 $ 96,525

FIFO
2005 2006 2007 2008
Units Rate Cost Units Rate Cost Units Rate Cost Units Rate Cost
Beginning Inventory 1,840 @20.00 $ 36,800 1,020 $ 21,620 1,040 $ 23,130 1,190 $ 27,720
Purchases 2,000 $ 41,750 3,100 $ 67,750 3,100 $ 70,975 1,910 $ 45,840
Available for Sale 3,840 $ 78,550 4,120 $ 89,370 4,140 $ 94,105 3,100 $ 73,560
Ending Inventory 1,020 $ 21,620 1,040 $ 23,130 1,190 $ 27,720 400 $ 9,600
COGS 2,820 $ 56,930 3,080 $ 66,240 2,950 $ 66,385 2,700 $ 63,960

Ending Inventory 1,020 $ 21,620 1,040 $ 23,130 1,190 $ 27,720 400 @24.00 $ 9,600
420 @21.00 8,820 40 @22.00 880 490 @23.00 11,270
Units remaining 400 @21.25 8,500 1,000 @22.25 22,250 700 @23.50 16,450
200 @21.50 4,300

Average Cost
2005 2006 2007 2007
Units Rate Cost Units Rate Cost Units Rate Cost Units Rate Cost
Beginning Inventory 1,840 @20.00 $ 36,800 1,020 $ 20,865 1,040 $ 22,369 1,190 $ 26,831
Purchases 2,000 $ 41,750 3,100 $ 67,750 3,100 $ 70,975 1,910 $ 45,840
Available for Sale 3,840 @20.46 $ 78,550 4,120 @21.51 $ 88,615 4,140 @22.55 $ 93,344 3,100 @23.44 $ 72,671
Ending Inventory 1,020 @20.46 $ 20,865 1,040 @21.51 $ 22,369 1,190 @22.55 $ 26,831 400 @23.44 $ 9,377
COGS 2,820 @20.46 $ 57,685 3,080 @21.51 $ 66,246 2,950 @22.55 $ 66,513 2,700 @23.44 $ 63,294

Net Income
2005 2006 2007 2008
FIFO Avg Cost Difference FIFO Avg Cost Difference FIFO Avg Cost Difference FIFO Avg Cost Difference
Sales $ 95,880 $ 95,880 $ - $ 110,110 $ 110,110 $ - $ 105,463 $ 105,463 $ - $ 96,525 $ 96,525 $ -
COGS $ 56,930 $ 57,685 $ 755 $ 66,240 $ 66,246 $ 6 $ 66,385 $ 66,513 $ 128 $ 63,960 $ 63,294 $ (666)
Gross Margin $ 38,950 $ 38,195 $ (755) $ 43,870 $ 43,864 $ (6) $ 39,078 $ 38,949 $ (128) $ 32,565 $ 33,231 $ 666
Tax Expense $ 15,580 $ 15,278 $ (302) $ 17,548 $ 17,546 $ (2) $ 15,631 $ 15,580 $ (51) $ 13,026 $ 13,292 $ 266
Net Income $ 23,370 $ 22,917 $ (453) $ 26,322 $ 26,318 $ (4) $ 23,447 $ 23,370 $ (77) $ 19,539 $ 19,939 $ 400