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The LIFO Reserve can increase only when: O inventory costs are stable. O inventory costs are...
AP7-3) Page 1864 P7-5 Evaluating the LIFO and FIFO Choice When Costs Are Rising and Falling...
AP7-3) Page 1864 P7-5 Evaluating the LIFO and FIFO Choice When Costs Are Rising and Falling L07-2,7-3 Income is to be evaluated under four different situations as follows: a. Prices are rising: (1) Situation A: FIFO is used. (2) Situation B: LIFO is used. b. Prices are falling: (1) Situation C: FIFO is used. (2) Situation D: LIFO is used. The basic data common to all four situations are sales, 500 units for $15,000: beginning inventory, 300 units purchases. 400...
During a period of rising inventory costs and stable output prices, describe how new income and...
During a period of rising inventory costs and stable output prices, describe how new income and total assets would differ depending upon whether LIFO or FIFO is applied. Explain how your answer would change if the company is experiencing declining inventory costs and stable output prices.
When costs to purchase inventory are falling over time, using LIFO leads to reporting ______ cost...
When costs to purchase inventory are falling over time, using LIFO leads to reporting ______ cost of goods sold and ______ net income than FIFO. Multiple Choice lower, lower higher; higher
Gross profit will be the: O A. lowest if LIFO is used and inventory costs are...
Gross profit will be the: O A. lowest if LIFO is used and inventory costs are increasing. O B. highest if LIFO is used and inventory costs are decreasing. Q C . highest if FIFO is used and inventory costs are increasing. UD. all of the above.
It is argued that LIFO should not be allowed to compute net income because a. b....
It is argued that LIFO should not be allowed to compute net income because a. b. C. it does not match costs to revenues, especially when there is inflation in the economy. it overstates balance sheet inventory. it understates cost of goods sold when prices are rising and therefore makes US companies' results look better than foreign companies' results which can only use FIFO. it causes profits to be understated when prices are rising and allows a company to dodge...
Which of the following statements on inventory turnover is incorrect? a. Inventory turnover is equal to...
Which of the following statements on inventory turnover is incorrect? a. Inventory turnover is equal to the cost of goods sold divided by average inventory. b. When costs are rising, inventory turnover under LIFO will be lower than under FIFO. c. When costs are decreasing, inventory turnover under LIFO will be lower than under FIFO. d. When costs are rising, inventory turnover under LIFO will be higher than under FIFO. Which of the following statements is incorrect? a.Inventory write-offs decrease...
The law of diminishing returns means that Multiple Choice O total product will eventually increase at...
The law of diminishing returns means that Multiple Choice O total product will eventually increase at a decreasing rate as more inputs are employed. O the marginal product will increase at an increasing rate. O average total costs are rising and then falling as output is increased. O average fixed cost will fall as production increases.
The diagram shows the market equilibrium exchange rate between the Japanese yen and the U.S. dollar (USD). Suppose that capital flows from the United States to Japan increase. Shift the demand a...
The diagram shows the market equilibrium exchange rate between the Japanese yen and the U.S. dollar (USD). Suppose that capital flows from the United States to Japan increase. Shift the demand and supply curves as appropriate. Quantity of yen This change in the exchange rate will result in the balances of payments on Japan's current account and financial account rising. o the balance of payments on Japan's current account falling as the balance of payments on Japan's financial This change...
The LIFO method of valuing inventory in an environment of rising prices and costs, generally results...
The LIFO method of valuing inventory in an environment of rising prices and costs, generally results in the following : All of the above An assumption that more recently acquired inventory is used for current production - leading to higher COGS and lower accounting profits Leads to a Balance Sheet that understates the market value of the inventory that remains Leads to a lower amount of corporate income tax being paid
Courtney Company uses a periodic inventory system. The following data were available: beginning inventory, 1,500 units...
Courtney Company uses a periodic inventory system. The following
data were available: beginning inventory, 1,500 units at $25;
purchases, 3,000 units at $28; operating expenses (excluding income
taxes), $94,000; ending inventory per physical count at December
31, 1,000 units; sales price per unit, $75; and average income tax
rate, 30%.
Prepare income statements under the FIFO, LIFO, and weighted
average costing methods.
PLEASE do not round intermediate calculations but can
you round the final answers to the nearest dollar
amount...
AP7-3) Page 1864 P7-5 Evaluating the LIFO and FIFO Choice When Costs Are Rising and Falling L07-2,7-3 Income is to be evaluated under four different situations as follows: a. Prices are rising: (1) Situation A: FIFO is used. (2) Situation B: LIFO is used. b. Prices are falling: (1) Situation C: FIFO is used. (2) Situation D: LIFO is used. The basic data common to all four situations are sales, 500 units for $15,000: beginning inventory, 300 units purchases. 400...
Gross profit will be the: O A. lowest if LIFO is used and inventory costs are increasing. O B. highest if LIFO is used and inventory costs are decreasing. Q C . highest if FIFO is used and inventory costs are increasing. UD. all of the above.
It is argued that LIFO should not be allowed to compute net income because a. b. C. it does not match costs to revenues, especially when there is inflation in the economy. it overstates balance sheet inventory. it understates cost of goods sold when prices are rising and therefore makes US companies' results look better than foreign companies' results which can only use FIFO. it causes profits to be understated when prices are rising and allows a company to dodge...
The law of diminishing returns means that Multiple Choice O total product will eventually increase at a decreasing rate as more inputs are employed. O the marginal product will increase at an increasing rate. O average total costs are rising and then falling as output is increased. O average fixed cost will fall as production increases.
The diagram shows the market equilibrium exchange rate between the Japanese yen and the U.S. dollar (USD). Suppose that capital flows from the United States to Japan increase. Shift the demand and supply curves as appropriate. Quantity of yen This change in the exchange rate will result in the balances of payments on Japan's current account and financial account rising. o the balance of payments on Japan's current account falling as the balance of payments on Japan's financial This change...
Courtney Company uses a periodic inventory system. The following
data were available: beginning inventory, 1,500 units at $25;
purchases, 3,000 units at $28; operating expenses (excluding income
taxes), $94,000; ending inventory per physical count at December
31, 1,000 units; sales price per unit, $75; and average income tax
rate, 30%.
Prepare income statements under the FIFO, LIFO, and weighted
average costing methods.
PLEASE do not round intermediate calculations but can
you round the final answers to the nearest dollar
amount...
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