The following information pertains to Mason Company for Year 2: Beginning inventory Units purchased 120 units 330 units e $40 e $44 Ending inventory consisted of 70 units. Mason sold 380 units at $88 each. All purchases and sales were made with cash. Operating expenses amounted to $3100. Required a. Compute the gross margin for Mason Company using the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. b. What is the amount of net income using FIFO, LIFO, and weighted average? (Ignore income tax considerations.) c. Determine the cash flow from operating activities, using each of the three cost flow assumptions listed in Requirement a. Ignore the effect of income taxes.

The following information pertains to Mason Company for Year 2: Beginning inventory Units purchased 120 units 330 units e $40 e $44 Ending inventory consisted of 70 units. Mason sold 380 units at $88 each. All purchases and sales were made with cash. Operating expenses amounted to $3100. Required a. Compute the gross margin for Mason Company using the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. b. What is the amount of net income using FIFO, LIFO, and weighted average? (Ignore income tax considerations.) c. Determine the cash flow from operating activities, using each of the three cost flow assumptions listed in Requirement a. Ignore the effect of income taxes.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter13: Accounting For Merchandise Inventory

Section: Chapter Questions

Problem 7SPB: COST ALLOCATION AND LOWER-OF-COST-OR-MARKET Hall Companys beginning inventory and purchases during...

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