Assume that a firm separately determined inventory under fifo and lifo and then compared the results. 1. In each space below, place the correct sign [less than (<), greater="" than=""><), or="" equal="" (=")]" for="" each="" comparison,="" assuming="" periods="" of="" rising=""> a. Lifo inventory                                _________ Fifo Inventory b. Lifo cost of goods sold               _________ Fifo cost of goods sold c. Lifo net income                             _________ Fifo net income d. Lifo income tax                             _________ Fifo income tax 2. Why would management prefer to use lifo over fifo in periods of rising prices?

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: calculate cost of goods sold, gross margin and ending inventory using i) FIFO and ii) Weighted -…

A: The objective of this question is to calculate the cost of goods sold (COGS), gross margin, and…

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

A: FIFO is a method used to value inventories. In First-In-First-Out (FIFO) method the cost of the…

Q: When following U.S. GAAP, the lower-of-cost-or-market rule for inventory requires a firm to report…

A: As per U.S. GAAP, the inventory should be reported in the balance sheet at their Cost or Market…

Q: Which of the following statements is correct in the context of the Income Statement prepared by a…

A: The Income Statement is prepared in order to show the result of operating a business for a period of…

Q: Which of the following levels of profitability in a multiple-step income statement represents…

A: Gross margin (gross profit): Gross margin is the amount of revenue earned from goods sold over the…

Q: Which inventory method provides a better matching ofcurrent costs with sales revenue on the income…

A: Inventory valuation is a method of finding the actual cost of the goods left unsold at the end of a…

Q: Problem 6-02A a, b1-b2, c (Part Level Submission) (Video) Glee Distribution markets CDs of the…

A: Under periodic inventory system, the cost of inventory can be valued using LIFO, FIFO and average…

Q: a. Total product cost a. Average cost per unit b. Cost of good sold c. Ending inventory d. Net…

A: Working note:Calculation of depreciation on manufacturing equipment:Depreciation = (cost - salvage…

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

A: Inventories are recognized lower of cost or market. This rule is applied to inventory item-wise.…

Q: Which inventory system provides a better matching of revenue and expenses - Weighted Average, Moving…

A: Following is the answer to given problem

Q: OA. weighted-average OB specific identification O C. last-in, frst-out OD. first-in, first-out

A: Introduction:- The following four accepted methods of costing items as follows under:- Specific…

Q: On the basis of the following data: Product InventoryQuantity Cost perUnit Market Value per…

A:

Q: Determine ending inventory using the dollar-value LIFO inventory method.

A: Dollar-value LIFO method: In this method, the valuation of inventory is calculated on the monetary…

Q: Put the inventory valuation methods in order from which one yields the highest to which one yields…

A: Inventory Valuation is a method of calculating the value of stock at the end of an accounting…

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: Which of the following inventory cost flow assumptions produces the same ending inventory values…

A: Periodic inventory system is a system where inventory records are updated on a periodic basis but in…

Q: For commercial reasons, a weighted average and inventory system from lifo fifo should be considered.

A: The LIFO (Last in, first-out) The LIFO accounting method is used to value inventory. This method is…

Q: Assuming that the price the company pays for inventory is increasing, which method will:

A: The appropriate answer is shown below

Q: Which of the following inventory cost flow assumptions produces the same ending inventory values…

A: Periodic Inventory System : In periodic inventory system ending balance of inventory will be updated…

Q: with information on the attached image Required: 1. The carrying amount of the total inventory of…

A: Inventory: Inventory is the value of units of goods purchased or manufactured, which are held during…

Q: The table below lists financial statement items that may be affected by the use of either the FIFO…

A: Rising costs is the situation when the prices keeps on increasing with time.

Q: During the period of increasing prices,

A: FIFO states that the inventory purchased first would be sold first. In the case of rising prices, in…

Q: Calculate (a) ending inventory and (b) Cost of goods sold under the LIFO and AVCO inventory costing…

A: LIFO is the inventory valuation method in which the goods that are bought at the end are sold first…

Q: The following information is taken from a company’s records.   Cost per Unit Market value per Unit…

A: Total cost = No. of units x Cost per unit Total market value = Market value per Unit x Cost per unit

Q: The inventory turnover ratio compares: A. current assets to inventory. B. cost of goods sold to…

A: INVENTORY TURNOVER RATIOInventory Turnover Ratio indicates whether the investment in inventory is…

Q: Required: 1. Compute cost of goods sold for each of the two items separately using the FIFO and LIFO…

A: Introduction: FIFO stands for First In First out. Under this standard inventory method, oldest…

Q: Which of the following is the correct calculation of rate of mark-up on selling price? a.…

A: Rate of Markup on Selling Price:-Sales price minus the unit cost that divides that number of unit…

Q: Using the following letters to represent items: P = purchases (net) C = cost of good sold B =…

A: We know, Ending inventory = Begining inventory + Purchases - Cost of good sold E = B + P - C

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

A: If the value of the inventory falls below its original cost before a company can sell it, companies…

Q: When inventory items are highly specialized, the best inventory costing method is ________.A.…

A: Inventory is one of the important current asset for the business. Management and valuation of…

Q: Weighted Average Cost (Periodic) Units Cost Goods Available for Sale Cost of Goods Sold Ending…

A: Inventory Valuation: It is an asset held for sale in the ordinary course of business. It is used in…

Q: Explain an example how to calculate inventory turnover ratio.

A: Inventory turnover ratio : Inventory turnover is used to find how many times a company sold its…

Q: How should you compute the number that appears as "cost of good sold" in a common-size income…

A: Lets understand the basics.There are two type of analysis are made.(1) Verticle analysis(2)…

Q: The inventory costinf method that best matches current costs with the current revenues is the 1)…

A: The objective of the question is to identify the inventory costing method that best matches current…

Q: The difference between Net sales and Cost of goods sold is referred as _____________.

A: Net Sales means Sales revenue less any sales return, discount and allowances whereas cost of Goods…

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: On the basis of the data shown below: Item Inventory Quantity Cost per Unit Market Value per Unit…

A: Inventory valuation is referred to as that method which helps in assigning a monetary value to the…

Q: lying lower-of-cost-and-net-realizable-value to the following data. em Cost Price/Unit Market…

A: Inventories should be valued at the lower of cost and net realizable value.Net realizable value…

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.