In a peiod of rising prices, which method would yield the lowest ending inventory, highest net income and the lowest amount of income tax?    Lowest Ending Inventory Highest Net Income   Lowest Income Taxes (I) LIFO LIFO LIFO (II) FIFO LIFO FIFO (III) FIFO FIFO FIFO (IV) LIFO FIFO LIFO

Q: When there are no inventory at the beginning or at the end of the period, the total purchases will…

A: The total purchase amount is the price agreed upon by the buyer and seller for an item, including…

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

A: Item A cost=Quantity×Cost per unit=186×$6=$1,116

Q: complete the following table which compares the effects of LIFO,  FIFO and weighted-average…

A: Inventory valuation in costing is done using mainly three methods namely FIFO, LIFO and weighted…

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: If the cost of an item of inventory is $52.00 and the current replacement cost is $70.00, what is…

A: As per lower of cost or market price method, we need to record the inventory at the lowest value of…

Q: 1.  The lower-of-cost-or-market method can be applied to each item of inventory. each major class…

A: In case of multiple questions, we are allowed to solve only the first question. In case if you want…

Q: 5. If a unit of inventory has declined in value below original cost, but the market value exceeds…

A: The procedure of determining the actual value of inventories at the end of the year is known as…

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

A: Inventory can be defined as a form of asset which is held by a business firm for resale purposes.…

Q: Which of the following statements about the LIFO Reserve Disclosure is NOT true?  a. Usually, FIFO…

A: The credit balance in the LIFO reserve reports the difference since the time that LIFO was adopted.…

Q: When would using the FIFO inventory costing method produce higher inventory account balancesthan the…

A: Inventory is one of the important asset for the business. Valuation and management of inventory is…

Q: Can you explain why the answer is B and not C. If inventory prices are decreasing wouldnt LIFO…

A: Yes, you are right in the falling inventory prices, the LIFO method would result in the selling of…

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

A: USING OF LIFO METHOD

Q: Which of the following statements is incorrect? Group of answer choices A)Ending inventory exceeds…

A: a) Cost of goods sold= Opening inventory + Purchases - Ending inventory Lets take a example…

Q: Under the lower of cost or market inventory valuation rule, market value of inventory is defined as:…

A: Market value is the price of an item/product prevailing in the market on the given date.

Q: Which of the following statements is incorrect?

A: Cost of Goods Sold: Cost of Goods sold is the Cost of the items that are sold it is calculated for…

Q: Which method of inventory valuation is not allowed when calculating profit for tax purposes? Select…

A: The inventory can be valued using various methods as LIFO, FIFO , weighted average method.

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: The following example was provided to encourage the use of the LIFO method. In a nutshell, LIFO…

A: “Hey, since there are multiple questions posted, we will answer first three questions. If you want…

Q: 1.Given a particular set of factsand assumptions, the following pairs of amounts were computed using…

A: LIFO = Last in, First out FIFO = First in, First out A) $20,650 =FIFO$19,400 = LIFO B) $10,650 =…

Q: Which of the following is equal to the cost of goods sold? a. net purchases plus the excess of…

A: The question is related to cost of goods sold. The cost of goods sold is calculated with the help of…

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: Explain how the inventory valuation method (LIFO or FIFO) chosen by a company affects the cost of…

A: Inventory management refers to the valuation of inventory in three ways FIFO, LIFO and weighted…

Q: Assuming no beginning inventory, what can be said about the trend of inventory prices if cost of…

A: The Various methods used to valuate inventory are (1) Last In, First Out (LIFO) (2) First In, First…

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

A: Introduction:

Q: amount of cost of sales?

A: (Note: Since you have posted multiple questions, we will solve the first question for you. For the…

Q: Determine the value of the inventory at the lower of cost or market. Apply lower of cost or market…

A: Lower of Cost per Unit or Market Value per Unit As the name saying, we record inventory on lower of…

Q: When there are no inventory at the beginning or at the end of the period, the total purchases will…

A: Cost of sales means actual cost of goods that is being sold to the customers. It includes beginning…

Q: Which inventory cost flow assumption would consistently result in the highest income in a period of…

A: Inventory valuation is done at the end of the accounting period and different inventory valuation…

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: 1. Prepare the income statement to reflect lower of cost or net realizable value valuation of the…

A: Lower of cost or NRV concept means the inventory should be reported at cost of NRV, whichever is…

Q: Match the term on the left to the appropriate description on the right. v Cost of goods available…

A: Cost of goods available for sale is used for calculating cost of goods sold, COGS=COGAS-Ending…

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: Lower-of-Cost-or-Market Method On the basis of the data shown below:   Item InventoryQuantity…

A: Calculation of value of inventory using lower of cost or market value:

Q: When a company determines that the net realizable value of its ending inventory is lower than its…

A: Lower of cost and net realizable value: The lower of cost and net realizable value is a method which…

Q: During a period of rising prices, which U.S. GAAP inventory method reports the most current…

A: Definition:

Q: In times of inflation (normal), the LIFO inventory method has ……………….. compared to FIFO:     a)…

A: >Cost flow from units purchased to Cost of goods sold can be done using either of the 4 methods:…

Q: If ending inventory in Period 1 is​ overstated, gross profit in Period 2​ is

A: The correct answer is Understated.

Q: answer the following regarding inventories.   The inventory costing method which in a period of…

A: The correct Answer is Last-in, First-out (LIFO) Method

Q: In a period of falling prices, the use of which inventory cost flow method would typically result in…

A: The inventory valuation is done at the end of the accounting period. Different techniques are…

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.