Brooks Photography: CGS and inventory, FIFO, LIFO, Wgted average,income stmt
The accounting records of Brooks Photography, Inc., reflected thefollowing balances as of January 1, 2012:
Cash $19,000
Beginning Inventory 6,750 (75 units $90)
Common Stock 7,500
Retained Earnings 18,250
The following five transactions occurred in 2012:
1. First purchase (cash) 100 units @ $92
2. Second purchase (cash) 175 units @ $100
3. Sales (all cash) 300 units @ $170
4. Paid $15,000 cash for operating expenses.
5. Paid cash for income tax at the rate of 30 percent of incomebefore taxes.
Please help with required items:
A. Compute the cost of goods sold and ending inventoy, assuming (1)FIFO cost flow, (2) LIFO cost flow, and (3) weighted- average costflow.
B. Use a vertical model to prepare the 2012 income statement,balance sheet, and statement of cash flows under FIFO, LIFO, andweighted average. (Record the events under an accounting equationbefore preparing the statements).
Brooks Photography: CGS and inventory, FIFO, LIFO, Wgted average,income stmt
The accounting records of Brooks Photography, Inc., reflected thefollowing balances as of January 1, 2012:
Cash $19,000
Beginning Inventory 6,750 (75 units $90)
Common Stock 7,500
Retained Earnings 18,250
The following five transactions occurred in 2012:
1. First purchase (cash) 100 units @ $92
2. Second purchase (cash) 175 units @ $100
3. Sales (all cash) 300 units @ $170
4. Paid $15,000 cash for operating expenses.
5. Paid cash for income tax at the rate of 30 percent of incomebefore taxes.
Please help with required items:
A. Compute the cost of goods sold and ending inventoy, assuming (1)FIFO cost flow, (2) LIFO cost flow, and (3) weighted- average costflow.
B. Use a vertical model to prepare the 2012 income statement,balance sheet, and statement of cash flows under FIFO, LIFO, andweighted average. (Record the events under an accounting equationbefore preparing the statements).
Related questions
| The accounting records ofCarrolâs Lamp Shop reflected the following balances as of January1, 2014: |
| Cash | $ | 90,500 | ||
| Beginninginventory | 28,000 | (200 units @ $140) | ||
| Common stock | 40,000 | |||
| Retainedearnings | 78,500 | |||
| The following fivetransactions occurred in 2014: | |
| 1. | First purchase (cash) 120 units@ $150 |
| 2. | Second purchase (cash) 140 units@ $160 |
| 3. | Sales (all cash) 400 units @$320 |
| 4. | Paid $40,000 cash for salariesexpense. |
| 5. | Paid cash for income tax at therate of 25 percent of income before taxes. |
| Required | |
| a. | Compute the cost of goods sold and ending inventory, assuming(1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-averagecost flow. b. prepare the 2014 income statement underFIFO, LIFO, and weighted average. c. prepare the 2014 balance sheet under FIFO,LIFO, and weighted average d. prepare the 2014 statement of cash flowsunder FIFO, LIFO, and weighted average |
E7-6 Analyzing and Interpreting the Financial Statement Effects of Periodic FIFO, LIFO, and Weighted Average Cost [LO 7-3]
| Orion Iron Corp. tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. |
| Transactions | Units | Unit Cost | ||||
| a. Inventory, Beginning | 350 | $ | 14 | |||
| For the year: | ||||||
| b. Purchase, April 11 | 950 | 12 | ||||
| c. Purchase, June 1 | 700 | 15 | ||||
| d. Sale, May 1 (sold for $42 per unit) | 350 | |||||
| e. Sale, July 3 (sold for $42 per unit) | 610 | |||||
| f. Operating expenses (excluding income tax expense), $18,000 | ||||||
| Required: |
| 1. | Calculate the number and cost of goods available for sale. |
| 2. | Calculate the number of units in ending inventory. |
| 3. | Compute the cost of ending inventory and cost of goods sold under (a) FIFO, (b) LIFO, and (c) weighted average cost. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.) |
| 4. | Prepare an Income Statement that shows the FIFO method, LIFO method and weighted average method. |
| 6. | Which inventory costing method minimizes income taxes? | ||||||
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