1. The Sta. Lucia Company organized in 2017, used the average costing method for its inventory. It is considering to change its inventory costing policy and to adopt the FIFO basis. Profit under the average costing method and Inventory costs, based on both average and FIFO method are shown below: Profit 2017 - 3,600,00 2018 - 5,000,000 2019 - 7,000,000 Inventory, end: Average basis 1,200,000 - 2017 1,300,000 - 2018 2,000,000 - 2019 FIFO basis 1,240,000 - 2017 1,420,000 - 218 2,650,000- 2019 REQUIRED: Determine the profit of Sta. Lucia Company for each of the three years had the company used the FIFO costing method. with explanation pls
1. The Sta. Lucia Company organized in 2017, used the average costing method for its inventory. It is considering to change its inventory costing policy and to adopt the FIFO basis. Profit under the average costing method and Inventory costs, based on both average and FIFO method are shown below: Profit 2017 - 3,600,00 2018 - 5,000,000 2019 - 7,000,000 Inventory, end: Average basis 1,200,000 - 2017 1,300,000 - 2018 2,000,000 - 2019 FIFO basis 1,240,000 - 2017 1,420,000 - 218 2,650,000- 2019 REQUIRED: Determine the profit of Sta. Lucia Company for each of the three years had the company used the FIFO costing method. with explanation pls
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter5: Inventories And Cost Of Goods Sold
Section: Chapter Questions
Problem 5.14AMCP
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1. The Sta. Lucia Company organized in 2017, used the average costing method for its inventory. It is considering to change its inventory costing policy and to adopt the FIFO basis. Profit under the average costing method and Inventory costs, based on both average and FIFO method are shown below:
Profit
2017 - 3,600,00
2018 - 5,000,000
2019 - 7,000,000
Inventory, end:
Average basis
1,200,000 - 2017
1,300,000 - 2018
2,000,000 - 2019
FIFO basis
1,240,000 - 2017
1,420,000 - 218
2,650,000- 2019
REQUIRED:
Determine the profit of Sta. Lucia Company for each of the three years had the company used the FIFO costing method.
with explanation pls
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