If inventory is being valued at cost and the price level is steadily rising, which of the three methods of costing—FIFO, UFO, or weighted average cost—will yield the lowest an­ nual income tax expense? Explain.

Q: Indicate whether a company interested in minimizing its income taxes should choose the FIFO orLIFO…

A: FIFO - First In First Out LIFO - Lase In First Out

Q: 7 During a period of steadily rising prices, which one of the following inventory valuation methods…

A: Hi student Since there are multiple questions, we will answer only first question. If you want…

Q: Net sales minus cost of good sold is equal to cost of ending inventory.   T/F

A: The ending inventory is the amount of inventory left with business at year end.

Q: Which inventory cost flow assumption generally results in the lowest reported amount for cost of…

A: The answer will be FIFO, First-in, first-out i.e. option B.

Q: If the ending inventory of a firm is overstated by $49,000, by how much and in what direction…

A: Computation of Income: Gross Profit = Sales – COGS COGS = Opening Inventory + Purchases – Closing…

Q: Compared to using the FIFO method to account for inventory, during periods of risingprices, a…

A: USING OF LIFO METHOD

Q: ending inventory increases therefore net income under AC and VC will be same Select one: True False

A: The income statement can be prepared using various approaches as contribution margin or absorption…

Q: Which of the following variations of the retail inventory method would generally result in the…

A: Rising prices basically means the situation where the prices of inventory keep on rising with each…

Q: How much are the ending inventory and cost of sales of Thursday Co respectively under average cost…

A: First in, first out:First is, first out is the method of inventory management and inventory…

Q: In a period of rising prices, the inventory cost allocation method that tends to result in the…

A: In the period of rising prices, method resulting in highest net income would be the method under…

Q: If costs are declining, will the LIFO or FIFO method of inventory valuation yield the lower cost of…

A: Inventory cost flow assumptions: These are the methods used by the companies to compute the cost…

Q: Which inventory valuation model serves as a middle-of-the-road approach for taxes and income? a.…

A: Under the FIFO and LIFO, the obtained cost of goods sold can be higher or lower than the actual…

Q: On the basis of the following data, determine the value of the inventory at the…

A: Note: Under the Lower of cost or Market method, inventory is valued at the lower of the Cost of the…

Q: hen purchase costs regularly rise, the inventory costing method that yields the highest reported net…

A: The inventory can be valued using various methods as LIFO, FIFO, average and specific identification…

Q: Which inventory costing method results in the lowest net income during a period of rising inventory…

A: Answer:LIFO is the correct option

Q: Which inventory method will result in lower net income in a period of rising prices? Which inventory…

A: First-in-First-Out (FIFO): In this method, items purchased initially are sold first. So, the value…

Q: 1) If the ending inventory is to be valued at approximately lower-of-cost-or-net realizable value,…

A: Cost to retail ratio may be defined as the division of cost of goods available for sale and retail…

Q: Lower-of-Cost-or-Market Inventory On the basis of the following data, determine the value of the…

A: Lower-of-cost-or-net realizable value: The lower-of-cost-or-net realizable value (LCNRV) is a method…

Q: Using the lower of cost or market, what should the total inventory value be for the following items:…

A: Value of inventory = Lower of Total cost price and Total market price

Q: If inventory is being valued at cost and the price level is steadily rising, which of the three…

A: Introduction:

Q: Which of the following is the advantage of using weighted average inventory valuation? When prices…

A: Under FIFO, beginning purchases constitutes the cost of goods sold and ending purchases are the…

Q: Which one of the following statements is true? a. Under conditions of rising prices, the LIFO…

A: Step 1    Last in, first-out (LIFO) is inventory method in which the costs of the most recent…

Q: Which inventory costing method results in the lowest net income during a period of rising inventory…

A: In case of LIFO method, most of the cost of goods sold is calculated at the latest price since the…

Q: Which inventory valuation model serves as a middle-of-the-road approach for taxes and income?…

A: When a corporation values its inventory using FIFO, it reports reduced COGS, which boosts its gross…

Q: On the basis of the following data, determine the value of the inventory at the lower of cost or…

A: Determine the value of inventory based on lower of cost or market price.

Q: On the basis of the following data, determine the value of the inventory at the…

A: Item Cost per unit Market value per unit Lower of cost or market value JFW1 $56 $52 $52 SAW9 28…

Q: During periods of rising costs, which inventory costing method produces the highest gross profit?

A: Inventory cost flow assumptions: These are the methods used by the companies to compute the cost…

Q: n a period of rising prices, which method would yield the lowest ending inventory, highest net…

A: Inventory valuation refers to the methods used by the company to determine the value of its…

Q: During a period when inventory costs are steadily increasing, which of the following is true? O a.…

A: FIFO considers the cost of initial purchases as the cost of goods sold and the later purchases as…

Q: Inventory Costing Method.

A: Methods of issuing the Material from store: THE Material purchased at first entered into the store…

Q: Compared to using the weighted average cost method to account for inventory, during aperiod in which…

A: First-in-First-Out (FIFO):   In First-in-First-Out method, the costs of the initially purchased…

Q: Identify the inventory costing method (SI, FIFO, LIFO, or WA) best described by each of the…

A: The relevant inventory valuation methods are listed as per the given information.

Q: When inventory costs rise and inventory quantities are not decreasing, what does the LIFO produces?

A: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of…

Q: Baxter Corporation has been using FIFO during a period ofrising costs. Explain whether you would…

A: Requirement a:   If Baxter have been using LIFO method during rising costs, the net income the…

Q: During periods of increasing costs, the use of the FIF0 method of costing inventory will result in a…

A: First-in-First-Out (FIFO): In this method, items purchased initially are sold first. So, the value…

Q: For companies using FIFO or LIFO, inventory on the balance sheet is valued at: OA. Replacement cost.…

A: The question is based on the concept of Accounting Standard on Inventory Valuation.

Q: On the basis of the following data, determine the value of the inventory at the lower of cost or…

A: Lower-of-cost-or-market value:The lower-of-cost-or-market value is a method which requires the…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.