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), 2,170 units at $36; purchases, 7,870 units at $38; expenses (excluding income taxes), $192,800; ending inventory per physical count at December 31, current year, 1,640 units; sales, 8,400 units; sales price per unit, $77; and average income tax rate, 34 percent. Required: 1-a. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. 1-b. Prepare income statements under the FIFO, LIFO, and average cost inventory costing methods.

Answer 1

ica) computation of cost of goods sold under Periodic system FIFO : → Total number of units - 10,ouo [ 211 0 +7870] ress: Ending (1640) inventory units sold & 8,400 cost of goods (2170x836) + (623 => [$314,860) * $36) + (6230x $ 38) LIFO 7.870*$38) + (530 $36] 180 cost of goods sold → (7,870 x $38) +. 155 $318,149 Average cost : Ang cost per unit & Total cost of units available for sale nou of units. -> (2190* $36) +3870 x $38) $377,1 (9170 +7870). → $37.5677 cost of goods sold & 8,400 x $37.57 $315, 569 10,040 LIFO $646,800 318, 140 Average cost $646,800 315, 569 331,231 192,800 1 income statement fi fo Sales Revenue [8400x $77). $646,800 less: Cost of goods sold 314,860 Gross Profit 331,940 less: Operating Expenses 192,800 Pretax incomes 139, 140 Less: ancome tax (34%), 47,308 Met income a 328,660 192,800 138,431 135,860 47 067 46, 192 89,668 91,364 91,832

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