Homework Answers
a when prices are falling, the LIFO method is likely to generate higher net income.
b. weighted average
c In an inflationary environment, the cost of goods includes the less expensive items while ending inventory includes the more expensive items. This means that the net income and ending inventory amounts are higher under the FIFO method.
d When prices are rising, you prefer LIFO because it gives you the highest cost of goods sold and the lowest taxable income.
e When prices are rising, the FIFO method produces the highest cost for ending inventory, the lowest cost of goods sold, and the highest gross margin (and net income).
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Effect of inventory cost flow assumption on financial statements Required For each of the following situations,...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $217,775 and average assets of $1,463,010. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $39,290 more than under FIFO, and its average assets would have been $42,760 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $235,546 and average assets of $1,496,540. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $48,370 more than under FIFO, and its average assets would have been $40,460 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $227,936 and average assets of $1,410,000. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $43,260 more than under FIFO, and its average assets would have been $43,930 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $276,359 and average assets of $1,424,900. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $34,440 more than under FIFO, and its average assets would have been $47,980 less than under FIFO. Required: a. Calculate the firm's Rol under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $256,538 and average assets of $1,535,130. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $39,560 more than under FIFO, and its average assets would have been $30,920 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $246,103 and average assets of $1,536,150. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $31,650 more than under FIFO, and its average assets would have been $35,170 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO Inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO Inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $281,376 and average assets of $1,552,240. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $34,420 more than under FIFO, and its average assets would have been $35,810 less than under FIFO. Required: a. Calculate the firm's Rol under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $211,098 and average assets of $1,421,970. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $38,280 more than under FIFO, and its average assets would have been $45,000 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
5 Inventory and Prepaids (10 Points) Saved Mannisto Inc. uses the FIFO inventory cost flow assumption....
5 Inventory and Prepaids (10 Points) Saved Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $222,805 and average assets of $1,497,010. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $43,620 more than under FIFO, and its average assets would have been $40,580 less than under FIFO. Required: a. Calculate the firm's ROI...
Mannisto Inc. uses the FIFO Inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO Inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $200,246 and average assets of $1,465,400. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $42.030 more than under FIFO, and its average assets would have been $39,520 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $217,775 and average assets of $1,463,010. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $39,290 more than under FIFO, and its average assets would have been $42,760 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $235,546 and average assets of $1,496,540. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $48,370 more than under FIFO, and its average assets would have been $40,460 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $227,936 and average assets of $1,410,000. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $43,260 more than under FIFO, and its average assets would have been $43,930 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $276,359 and average assets of $1,424,900. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $34,440 more than under FIFO, and its average assets would have been $47,980 less than under FIFO. Required: a. Calculate the firm's Rol under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $256,538 and average assets of $1,535,130. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $39,560 more than under FIFO, and its average assets would have been $30,920 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $246,103 and average assets of $1,536,150. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $31,650 more than under FIFO, and its average assets would have been $35,170 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO Inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $281,376 and average assets of $1,552,240. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $34,420 more than under FIFO, and its average assets would have been $35,810 less than under FIFO. Required: a. Calculate the firm's Rol under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $211,098 and average assets of $1,421,970. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $38,280 more than under FIFO, and its average assets would have been $45,000 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
5 Inventory and Prepaids (10 Points) Saved Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $222,805 and average assets of $1,497,010. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $43,620 more than under FIFO, and its average assets would have been $40,580 less than under FIFO. Required: a. Calculate the firm's ROI...
Mannisto Inc. uses the FIFO Inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $200,246 and average assets of $1,465,400. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $42.030 more than under FIFO, and its average assets would have been $39,520 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
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