ACCTMIS 2000 Study Guide - Midterm Guide: Accounts Receivable, Inventory Turnover, Financial Statement
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Periodic Inventory Method | |||||||||
Better Bottles, Inc. uses a PERIODIC inventory system and has the following information available: | |||||||||
Description | # of Units | Cost per Unit | Total Cost | ||||||
Beginning inventory | 20 | $20.00 | $400 | ||||||
Jan 5 sold | 15 | ||||||||
Jan 15 purchase | 27 | $22.00 | 594 | ||||||
Jan 18 sold | 21 | ||||||||
Jan 20 purchase | 33 | $30.00 | 990 | ||||||
Total goods available for sale | 80 | $1,984 | |||||||
Total goods sold | 36 | ||||||||
Required: | |||||||||
1 | Calculate both Cost of goods sold and Ending inventory using the Periodic FIFO Method. | ||||||||
2 | Calculate both Cost of good sold and Ending Inventory using Periodic LIFO Method. | ||||||||
3 | Use your calculations from 1-2 and complete the Income Statement. | ||||||||
The company income tax rate: | 0.25 | ||||||||
1 | FIFO Cost of Goods Sold - PERIODIC | ||||||||
Units Sold Taken From: | # of Units | Cost per Unit | Total Cost | ||||||
Total Cost of Goods Sold FIFO | |||||||||
FIFO Ending Inventory - PERIODIC | |||||||||
Inventory Available | # of Units | Cost per Unit | Total Cost | ||||||
Beginning inventory | |||||||||
+Purchase | |||||||||
+Purchase | |||||||||
(Less Cost of Goods Sold) | |||||||||
Ending Inventory FIFO | |||||||||
2 | LIFO Cost of Goods Sold - PERIODIC | ||||||||
Units Sold Taken From: | # of Units | Cost per Unit | Total Cost | ||||||
Total Cost of Goods Sold LIFO | |||||||||
LIFO Ending Inventory - PERIODIC | |||||||||
Inventory Available | # of Units | Cost per Unit | Total Cost | ||||||
Beginning inventory | |||||||||
+Purchase | |||||||||
+Purchase | |||||||||
(Less Cost of Goods Sold) | |||||||||
Ending Inventory LIFO | |||||||||
3 | Income Statement - Periodic Inventory Method | ||||||||
FIFO | LIFO | ||||||||
Sales revenue, net | 25,000 | 25,000 | |||||||
Cost of goods sold | |||||||||
Gross profit | |||||||||
Operating expenses | 8,000 | 8,000 | |||||||
Operating income before tax | |||||||||
Income tax expense | |||||||||
Net income | |||||||||
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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Required information
Problem 6-1A Perpetual: Alternative cost flows LO P1
[The following information applies to the questionsdisplayed below.]
Warnerwoods Company uses a perpetual inventory system. It enteredinto the following purchases and sales transactions forMarch.
Date | Activities | Units Acquired at Cost | Units Sold at Retail | |||||||||
Mar. | 1 | Beginning inventory | 100 | units | @ $50.00 per unit | |||||||
Mar. | 5 | Purchase | 400 | units | @ $55.00 per unit | |||||||
Mar. | 9 | Sales | 420 | units | @ $85.00 per unit | |||||||
Mar. | 18 | Purchase | 120 | units | @ $60.00 per unit | |||||||
Mar. | 25 | Purchase | 200 | units | @ $62.00 per unit | |||||||
Mar. | 29 | Sales | 160 | units | @ $95.00 per unit | |||||||
Totals | 820 | units | 580 | units | ||||||||
3. Compute the cost assigned to endinginventory using (a) FIFO, (b) LIFO, (c)weighted average, and (d) specific identification. Forspecific identification, the March 9 sale consisted of 80 unitsfrom beginning inventory and 340 units from the March 5 purchase;the March 29 sale consisted of 40 units from the March 18 purchaseand 120 units from the March 25 purchase.
Complete this questions by entering your answers in thebelow tabs.
Perpetual FIFO
Perpetual LIFO
Weighted Average
Specific Id
Compute the cost assigned to ending inventory using FIFO.
|
Complete this questions by entering your answers in thebelow tabs.
Perpetual FIFO
Perpetual LIFO
Weighted Average
Specific Id
Compute the cost assigned to ending inventory using LIFO.
|
Perpetual FIFO
Weighted
Complete this questions by entering your answers in thebelow tabs.
Perpetual FIFO
Perpetual LIFO
Weighted Average
Specific Id
Compute the cost assigned to ending inventory using weightedaverage. (Round your average cost per unit to 2 decimalplaces.)
|
Perpetual LIFO
Compute the cost assigned to ending inventory using specificidentification. For specific identification, the March 9 saleconsisted of 80 units from beginning inventory and 340 units fromthe March 5 purchase; the March 29 sale consisted of 40 units fromthe March 18 purchase and 120 units from the March 25 purchase.
|
Weighted Average
Sp