Learning Objectives 2, 3 Appendix 6A P6A-32A Accounting for inventory using the periodic inventory system FIFO, LIFO, and weighted-average, and comparing FIFO, LIFO, and weighted-average 1. LIFO Ending Merch. Inv., $6 Futuristic Electronic Center began October with 65 units of merchandise inventory that cost $82 each. During October, the store made the following purchases: 25 units @ $ 90 each Oct. 3 30 units @ $ 90 each 12 35 units @ $ 96 each 18 Futuristic uses the periodic inventory system, and the physical count at October 31 indicates that 80 units of merchandise inventory are on hand. Requirements 1. Determine the ending merchandise inventory and cost of goods sold amounts for the October financial statements using the FIFO, LIFO, and weighted-average inventory costing methods. 2. Net sales revenue for October totaled $28,000. Compute Futuristic's gross profit for October using each method. 3. Which method will result in the lowest income taxes for Futuristic? Why? Which method will result in the highest net income for Futuristic? Why?

Learning Objectives 2, 3 Appendix 6A P6A-32A Accounting for inventory using the periodic inventory system FIFO, LIFO, and weighted-average, and comparing FIFO, LIFO, and weighted-average 1. LIFO Ending Merch. Inv., $6 Futuristic Electronic Center began October with 65 units of merchandise inventory that cost $82 each. During October, the store made the following purchases: 25 units @ $ 90 each Oct. 3 30 units @ $ 90 each 12 35 units @ $ 96 each 18 Futuristic uses the periodic inventory system, and the physical count at October 31 indicates that 80 units of merchandise inventory are on hand. Requirements 1. Determine the ending merchandise inventory and cost of goods sold amounts for the October financial statements using the FIFO, LIFO, and weighted-average inventory costing methods. 2. Net sales revenue for October totaled $28,000. Compute Futuristic's gross profit for October using each method. 3. Which method will result in the lowest income taxes for Futuristic? Why? Which method will result in the highest net income for Futuristic? Why?

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter6: Inventories

Section: Chapter Questions

Problem 6.3APR

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(Learning Objective 2: Apply various inventory costing methods) A Gold MedalSports outlet store began August 2018 with 42 pairs of running shoes that cost the store $31each. The sales price of these shoes was $63. During August, the store completed these inventory transactions:Units Unit CostSale ............. 16 $319 Purchase...... 81 33$6313 Sale ............. 26 31 63Sale ............. 33 6422 Sale ............. 36 33 6429 Purchase...... 18 35Aug 218 13Unit Sales PriceRequirements1. The preceding data are taken from the store’s perpetual inventory records. Which costmethod does the store use? Explain how you arrived at your answer.2. Determine the store’s cost of goods sold for August. Also compute gross profit for August.3. What is the cost of the store’s August 31 inventory of running shoes?
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