Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period. In Last-in-First-Out method, the costs of last purchased items are sold first. The value of the closing stock consist the initial purchased items. To Compute: The ending inventory and cost of goods sold for 2018.

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Chapter 8, Problem 8.4P

1.

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

In Last-in-First-Out method, the costs of last purchased items are sold first. The value of the closing stock consist the initial purchased items.

To Compute: The ending inventory and cost of goods sold for 2018.

2.

To determine

To Compute: The income before income taxes for 2018.

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