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- Compute the total inventory value that should be shown on the statement of financial position for these 3 types of componentsThe accounting for inventory involves determining the correct unit counts comprising ending inventory, and then assigning a value to those units. Explain the 3 important types of InventoriesFIFO, Average cost, and LIFO are often used for inventory valuation purposes. Compare these methods and discuss the effects of each method in the determination of income and asset management
- Which of the following statements about merchandisingactivities is true? (More than one answer may be correct.)a. As inventory is purchased, the Inventory Expenseaccount is debited and Cash (or Accounts Payable) iscredited.b. Inventory is recorded as an asset when it is firstpurchased. c. As inventory is sold, its cost is transferred from the bal-ance sheet to the income statement. d. As inventory is sold, its cost is transferred from theincome statement to the balance sheet.1. Explain the effect of each inventory cost flow method on the company's net income 2. Recommed one method and explain the reasons for your recommendationWhich of the following statements about FIFO is true? Select one: a. All of the statements are correct b. Cost of goods sold is calculated using the costs of the earliest purchased inventory. c. The value of merchandise inventory is made up of the costs of the most recently purchased inventory. d. Under FIFO, a schedule is used to track the different costs of purchased inventory.
- The goal of this is to review concepts in inventory cost methods. Directions 1.What are the three primary inventory cost flow assumptions? 2. How is cost of goods sold calculated in each of the inventory cost flow assumptions? 3. How does the specific identification method differ from these three primary inventory cost flow assumptions? explain in good detail responses for each one of the questionsWhich method results in a balance sheet valuation of inventory method farthest away from its economic value? Select one: a. FIFO b. LIFO c. Weighted Average PreviousSave AnswersNextBased on the data in Exercise 6-15 part (a) and assuming that cost was determined by the FIFO method, show how the inventory would appear on the balance sheet.
- Use the weighted-average (AVG) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for B75 Company, considering the following transactions.Planning and regulating inventory use and their associated expenses is the focus of a substantial quantity of accounting information. Explain, using examples, the five types of expenses connected with resale products and the resources required to produce it1. Which one of the following types of costs is most likely to be included in determining the cost of inventory?a. Freight-inb. Interest cost for amounts borrowed to finance the purchase of inventoryc. Freight-outd. Marketing cost 2. Which of the following equation is correct and used in costing?a. Beginning Inventory + Purchases + Ending Inventory = Cost of Goods Soldb. Cost of Goods Sold - Ending Inventory - Purchases = Beginning Inventoryc. Cost of Goods Sold + Ending Inventory - Beginning Inventory = Purchasesd. Beginning Inventory + Cost of Goods Sold - Purchases = Ending Inventory
