INTERMEDIATE ACCOUNTING LL W/ ACCESS 540
10th Edition
ISBN: 9781264688715
Author: SPICELAND
Publisher: MCG
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Required:a. Complete a subsidiary ledger record for the computer using each of the three inventory valuation methods listed below
1. Average cost.2. FIFO.3. LIFO.
Your inventory records should show both purchases of this product, the sale on Mar 31, and the balance on hand on Mar 31, 2020.
b. Which of the three cost flow assumptions will result in reporting the lowest net income for the current year? Explain
Calculate the LIFO cost of goods sold and ending inventory for 2018 and 2019 assuming use of (a) the peri-odic method and (b) the perpetual method
In presenting inventory on the balance sheet December 31, 2021, the unit cost under absorption costing is
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- Use the weighted-average (AVG) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for A75 Company, considering the following transactions.arrow_forwardBased on the data in Exercise 6-15 part (a) and assuming that cost was determined by the FIFO method, show how the inventory would appear on the balance sheet.arrow_forwardCalculate a) cost of goods sold, b) ending inventory, and c) gross margin for A76 Company, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for first-in, first-out (FIFO).arrow_forward
- Use the last-in, first-out (LIFO) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for A75 Company, considering the following transactions.arrow_forwardCalculate a) cost of goods sold, b) ending inventory, and c) gross margin for B76 Company, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for last-in, first-out (LIFO).arrow_forwardCalculate a) cost of goods sold, b) ending inventory, and c) gross margin for B76 Company, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for weighted average (AVG).arrow_forward
- Use the first-in, first-out (FIFO) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for A75 Company, considering the following transactions.arrow_forwardThe following information is taken from a companys records. Applying the lower-of-cost-or-market approach, what is the correct value that should be reported on the balance sheet for the inventory?arrow_forwardLupin Inc. utilizes the retail inventory method in estimating its inventory for interim statement purposes. Information in connection to the computation of the inventory at July 31, 2021 are the following: How much is Lupin's estimated inventory at July 31, 2021 under the average cost retail method?arrow_forward
- Required: Answer the following independent questions and show all computations supporting your answers. a) Assume that the company uses the FIFO method. The value of the ending inventory atDecember 31 is $__________. b) Assume that the company uses the LIFO method. The value of the ending inventory onDecember 31 is $__________.c) Determine the difference in the amount of income that the company would have reported if ithad used the FIFO method instead of the LIFO method. Would income have been greater orless? Which method would provide more tax advantage? -Explain your rationale.arrow_forwardSugarbaker Designs Inc. changed from the FIFO inventory costing method to the average cost method during 2021. Which items from the 2020 financial statements should be restated on the basis of the average cost method when reported in the 2021 comparative financial statements?arrow_forwardPrepare a memorandum containing responses to the following items. a. Describe the cost flow assumptions used in average-cost, FIFO, and LIFO methods of inventory valuation. b. Distinguish between weighted-average-cost and moving-average-cost for inventory costing purposes. c. Identify the effects on both the balance sheet and the income statement of using the LIFO method instead of the FIFO method for inventory costing purposes over a substantial time period when purchase prices of inventoriable items are rising. State why these effects take place.arrow_forward
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