Question

Required information [The following information applies to the questions displayed below) Daniel Company uses a periodic Inventory system. Data for the current year: beginning merchandise inventory (ending Inventory December 31, prior year), 2.080 units at $35 purchases, 7,970 units at $37, expenses (excluding income taxes $192,800, ending Inventory per physical count at December 31, current year, 1710 units sales, 8,340 units, sales price per unit. $79, and average income tax rate, 32 percent. Required: 1. Compute cost of goods sold and prepare income statements under the FIFO, UFO, and average cost inventory costing methods (Round your final answers to nearest whole dollar. Do not round your intermediate calculations.) Inventory Costing Method FIFO LIFO Units Average Cost Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Income Statement FIFO LIFO Average Cost

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet. For detailed answer refer to the supporting sheet.

A Cost of goods sold Beginning inventory Units 2080 Purchases 7970 Answer Inventory Costing Method FIFO LIFO Average Cost 7 2800 72800 72800 (2080*35) (2080*35) (2080*35) 294890 294890 294890 (7970*37) (7970*37) (7970*37) 367690 367690 367690 63270 59850 62562 (1710*37) (1710*35) (1710*1367690/1710)) 304420 307840 305128 Goods available for sale Ending inventory 10050 1710 1 Cost of goods sold 8340 B Income Statement Sales Revenue Cost of goods sold Gross Margin B Expenese Net Income Before Tax Tax Expense (income before tax *32%) FIFO LIFO Average Cost 658860 658860 6 58860 (8340*79) (8340*79) (8340*79) 304420 307840 305128 354440 351020 353732 192800 192800 192800 161640 158220 160932 51725 50630 51498 |(161640*32%)|(158220*32%)|(160932*32%), 109915 107590 109434 2 Net Income after tax Note the unbold amount are just for understanding 5 Formula 5 ending inventory = No. of units in ending inventory* Cost as pe FIFO / LIFO / Average cost respectively