Homework Answers
| FIFO | matches actual flow of goods with actual flow of costs |
| FIFO | matches old costs with new sales prices |
| FIFO | results in lowest net income in periods of falling prices |
| LIFO | matches recent costs with new sales prices |
| specific identification | does not assume any particular flow of goods |
| FIFO | best for perishables |
| FIFO | values ending inventory at approximate replacement cost |
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Required: Choose the method of inventory valuation that corresponds to each of the statements that follow:...
Identify the inventory costing method best described by each of the following separate statements. Assume a...
Identify the inventory costing method best described by each of the following separate statements. Assume a period of increasing costs 1. Assigns the lowest amount to cost of goods sold 2. Mimics the actual flow of inventory. 3. |Yields the lowest gross profit. 4. Tends to smooth out the erratic changes in costs. 5. Matches the cost of items exactly with the revenues they generate. FIFO Specific identification Weighted average LIFO
Effect of inventory cost flow assumption on financial statements Required For each of the following situations,...
Effect of inventory cost flow assumption on financial statements Required For each of the following situations, indicate whether FIFO, LIFO, or weighted average applies: a. In a period of falling prices, net income would be highest. b. In a period of falling prices, the unit cost of goods would be the same for ending inventory and cost of goods sold. c. In a period of rising prices, net income would be highest. d. In a period of rising prices, cost...
When inventory prices are increasing, which inventory valuation method would give you the lowest cost of...
When inventory prices are increasing, which inventory valuation method would give you the lowest cost of goods sold? B. FIFO LIFO Weighted Average Specific Identification D. The net method of recording sales violates the: A. Matching Principle Cost Principle Revenue Principle De here] D. None of the Above The formula for calculating the COGS when using the periodic inventory system is COGS=COST-SALVAGE VALUE/LIFE COGS=SALES LESS EXPENSES COGS=BI+NP-EI COGSEBEGING INVENTORY-ENDING INVENTORY-GAFS D.
Problem 3 (12 pts.): Inventory and cost of goods sold calculations made under the FIFO and...
Problem 3 (12 pts.): Inventory and cost of goods sold calculations made under the FIFO and LIFO methods of inventory valuation are presented below for ABC Co. This company has a tax rate of 30%. Ending inventory Cost of goods sold FIFO S118.000 $837.000 $955.000 LIFO $ 55.000 $900.000 $955.000 Use the data above to answer the Following Questions. SHOW YOUR WORK. a) Assuming Sales for the company total $3.000.000, calculate the difference in the amount of Gross Profit ABC...
In a period of rising prices, which inventory valuation method (LIFO or FIFO) tends to result...
In a period of rising prices, which inventory valuation method (LIFO or FIFO) tends to result in the following? a. Highest cost of goods sold b. Lowest inventory valuation c. Highest income taxes
5. In a period of rising prices, which inventory valuation method would generally yield both the...
5. In a period of rising prices, which inventory valuation method would generally yield both the lowest ending inventory value and the lowest net income figure? a. First in, first out (FIFO) b. Last in, first out (LIFo) c. Weighted average d. Standard cost
Help Save & Exit Submit Identify the inventory costing method best described by each of the...
Help Save & Exit Submit Identify the inventory costing method best described by each of the following separate statements. Assume a period of increasing costs. 1. Yields a balance sheet inventory amount often markedly less than its replacement cost 2. Results in a balance sheet inventory amount approximating replacement ou 3. Provides a tax advantage (deferral) to a corporation when costs are rising 4. Recognizes (matches) recent costs against net sales 5. The preferred method when each unit of product...
How does the retail inventory method establish the lower-of-cost-or-market valuation for ending inventory? 1. The procedure...
How does the retail inventory method establish the lower-of-cost-or-market valuation for ending inventory? 1. The procedure is applied on a cost basis at the unit level. 2. By excluding net markups from the cost-to-retail ratio. 3. By excluding beginning inventory from the cost-to-retail ratio. 4. By excluding net markdowns from the cost-to-retail ratio. The original cost of an inventory item is above the replacement cost and below the net realizable value. The net realizable value less the normal profit margin...
Problem 1 - Inventory Valuation (10 points total) Green Store uses a PERIODIC inventory system and had the followin...
Problem 1 - Inventory Valuation (10 points total) Green Store uses a PERIODIC inventory system and had the following transactions for one of its inventory items during 2019: Beginning Inventory 60 units @ $27 per unit Purchases Purchase I on 3/11/19 Purchase 2 on 10/18/19 60 units @ $29 per unit 40 units @ $30 per unit Sales: Sale I on 3/15/19 Sale 2 on 10/22/19 50 units @ $70 per unit 75 units @ $70 per unit The units...
26. An ventory available. that yields the 21. Physical cons of inventory: 1. Are not necessary...
26. An ventory available. that yields the 21. Physical cons of inventory: 1. Are not necessary under the perpetual system. R. Are meressary to adjust the loventory account to the actual inventory Must be taken at least once a month. D. Requires the use of hand-held portable computers. Are a necessary under the cost to benefit constraint. 22. During a period of steadily rising costs, the inventory valuation method that yields lowest reported net income is: A. Specific identification method....
Identify the inventory costing method best described by each of the following separate statements. Assume a period of increasing costs 1. Assigns the lowest amount to cost of goods sold 2. Mimics the actual flow of inventory. 3. |Yields the lowest gross profit. 4. Tends to smooth out the erratic changes in costs. 5. Matches the cost of items exactly with the revenues they generate. FIFO Specific identification Weighted average LIFO
Effect of inventory cost flow assumption on financial statements Required For each of the following situations, indicate whether FIFO, LIFO, or weighted average applies: a. In a period of falling prices, net income would be highest. b. In a period of falling prices, the unit cost of goods would be the same for ending inventory and cost of goods sold. c. In a period of rising prices, net income would be highest. d. In a period of rising prices, cost...
When inventory prices are increasing, which inventory valuation method would give you the lowest cost of goods sold? B. FIFO LIFO Weighted Average Specific Identification D. The net method of recording sales violates the: A. Matching Principle Cost Principle Revenue Principle De here] D. None of the Above The formula for calculating the COGS when using the periodic inventory system is COGS=COST-SALVAGE VALUE/LIFE COGS=SALES LESS EXPENSES COGS=BI+NP-EI COGSEBEGING INVENTORY-ENDING INVENTORY-GAFS D.
Problem 3 (12 pts.): Inventory and cost of goods sold calculations made under the FIFO and LIFO methods of inventory valuation are presented below for ABC Co. This company has a tax rate of 30%. Ending inventory Cost of goods sold FIFO S118.000 $837.000 $955.000 LIFO $ 55.000 $900.000 $955.000 Use the data above to answer the Following Questions. SHOW YOUR WORK. a) Assuming Sales for the company total $3.000.000, calculate the difference in the amount of Gross Profit ABC...
5. In a period of rising prices, which inventory valuation method would generally yield both the lowest ending inventory value and the lowest net income figure? a. First in, first out (FIFO) b. Last in, first out (LIFo) c. Weighted average d. Standard cost
Help Save & Exit Submit Identify the inventory costing method best described by each of the following separate statements. Assume a period of increasing costs. 1. Yields a balance sheet inventory amount often markedly less than its replacement cost 2. Results in a balance sheet inventory amount approximating replacement ou 3. Provides a tax advantage (deferral) to a corporation when costs are rising 4. Recognizes (matches) recent costs against net sales 5. The preferred method when each unit of product...
Problem 1 - Inventory Valuation (10 points total) Green Store uses a PERIODIC inventory system and had the following transactions for one of its inventory items during 2019: Beginning Inventory 60 units @ $27 per unit Purchases Purchase I on 3/11/19 Purchase 2 on 10/18/19 60 units @ $29 per unit 40 units @ $30 per unit Sales: Sale I on 3/15/19 Sale 2 on 10/22/19 50 units @ $70 per unit 75 units @ $70 per unit The units...
26. An ventory available. that yields the 21. Physical cons of inventory: 1. Are not necessary under the perpetual system. R. Are meressary to adjust the loventory account to the actual inventory Must be taken at least once a month. D. Requires the use of hand-held portable computers. Are a necessary under the cost to benefit constraint. 22. During a period of steadily rising costs, the inventory valuation method that yields lowest reported net income is: A. Specific identification method....
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