What is the primary motive behind the choice of inventory cost flow method, profit or taxes?...
What is the primary motive behind the choice of inventory cost flow method, profit or taxes? And how does the use of LIFO inventory cost flow method help to prevent the reporting of inventory profit?
Homework Answers
Profit is the primary motive behind the choice of inventory cost of method. At the time of rising prices, the LIFO method results in the higher cost of goods sold as a result the profit decreases.
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What is the primary motive behind the choice of
inventory cost flow method, profit or taxes?...
15. In a period of inflation, the cost flow method that results in the lowest income...
15. In a period of inflation, the cost flow method that results in the lowest income taxes is the: a. FIFO method. b. LIFO method. c. average cost method. d. gross profit method. 16. The following information is available for Tye Company at December 31: Beginning inventory $5,000; Ending inventory $8,000: Cost of goods sold $23,000; and Sales revenue $60,000. Tye's inventory turnover is: (round the answer to I decimal place a. 9.2 times b. 4.6 times c. 3.5 times...
1> The use of the lower of cost or market method to value inventory for reporting...
1> The use of the lower of cost or market method to value inventory for reporting purposes is related to the accounting principle of: A. verifiability B. conservatism C. matching D. historical cost 2> The size of the LIFO cash flow advantage depends on all of the following EXCEPT A. days of inventory B. tax rate C. severity of input cost change D. rapidity of fixed asset turnover
Requirement 2. Compute cost of goods sold and gross profit using the LIFO inventory costing method...
Requirement 2. Compute cost of goods sold and gross profit using the LIFO inventory costing method Begin by computing the cost of goods sold and cost of ending merchandise inventory using the LIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end...
If prices are rising, which inventory cost flow method will produce the lowest amount of cost...
If prices are rising, which inventory cost flow method will produce the lowest amount of cost of goods sold? FIFO Weighted average LIFO LIFO, FIFO, and the weighted-average inventory cost flow methods will all produce equal amounts of cost of goods sold. 1 points QUESTION 7 West Corporation's Year 1 ending inventory was overstated by $20,000; however, ending inventory for Year 2 was correct. Which of the following statements is correct? Cost of goods sold for Year 1 is...
E7-9 Evaluating the Choice among Three Alternative Inventory Methods Based on Cash Flow Effects LO7-2, 7-3...
E7-9 Evaluating the Choice among Three Alternative Inventory Methods Based on Cash Flow Effects LO7-2, 7-3 Following is partial information for the income statement of Audio Solutions Company under three different inventory costing methods, assuming the use of a periodic inventory system: Required: 1. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. (Do not round intermediate calculations.) COGS Beg inventory (400 units @ $28) Purchases (475 units @35) Goods available ending inventory (525)...
Requirement 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method....
Requirement 1. Compute cost of goods sold and gross profit using
the FIFO inventory costing method.
Begin by computing the cost of goods sold and cost of ending
merchandise inventory using the FIFO inventory costing method.
Enter the transactions in chronological order, calculating new
inventory on hand balances after each transaction. Once all of the
transactions have been entered into the perpetual record,
calculate the quantity and total cost of merchandise inventory
purchased, sold, and on hand at the end...
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...
ATW Corporation currently uses the FIFO method of accounting for its inventory for book and tax...
ATW Corporation currently uses the FIFO method of accounting for its inventory for book and tax purposes. Its beginning inventory for the current year was $8,000,000. Its ending inventory for the current year was $7,000,000. If ATW had been using the LIFO method of accounting for its inventory, its beginning inventory would have been $7,000,000 and its ending inventory would have been $5,500,000. Problem 5-30 Part a a. How much more in taxes did ATW Corporation pay for the current...
The primary advantage of a just-in-time inventory system is: Multiple Choice The primary advantage of a...
The primary advantage of a just-in-time inventory system is:
Multiple Choice
The primary advantage of a just-in-time inventory system is: Multiple Choice The amount of money tied up in inventory is minimized. O Customers are afforded a wider selection of merchandise available for immediate delivery. o The company is able to use the specific identification method of inventory pricing. ooo The risks of losing sales opportunities or of having to shut down manufacturing operations because of inventory shortages are minimized.
Requirement 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method...
Requirement 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transacions in chronalogical order, calculating news inventory an hand balances ater each transaction Once all of the transacions have been entered into the perpetal record, caloulate the quantly and total oost of merchandise inventory purchased, sold, and on hand at the end...
15. In a period of inflation, the cost flow method that results in the lowest income taxes is the: a. FIFO method. b. LIFO method. c. average cost method. d. gross profit method. 16. The following information is available for Tye Company at December 31: Beginning inventory $5,000; Ending inventory $8,000: Cost of goods sold $23,000; and Sales revenue $60,000. Tye's inventory turnover is: (round the answer to I decimal place a. 9.2 times b. 4.6 times c. 3.5 times...
Requirement 2. Compute cost of goods sold and gross profit using the LIFO inventory costing method Begin by computing the cost of goods sold and cost of ending merchandise inventory using the LIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end...
Requirement 1. Compute cost of goods sold and gross profit using
the FIFO inventory costing method.
Begin by computing the cost of goods sold and cost of ending
merchandise inventory using the FIFO inventory costing method.
Enter the transactions in chronological order, calculating new
inventory on hand balances after each transaction. Once all of the
transactions have been entered into the perpetual record,
calculate the quantity and total cost of merchandise inventory
purchased, sold, and on hand at the end...
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...
ATW Corporation currently uses the FIFO method of accounting for its inventory for book and tax purposes. Its beginning inventory for the current year was $8,000,000. Its ending inventory for the current year was $7,000,000. If ATW had been using the LIFO method of accounting for its inventory, its beginning inventory would have been $7,000,000 and its ending inventory would have been $5,500,000. Problem 5-30 Part a a. How much more in taxes did ATW Corporation pay for the current...
The primary advantage of a just-in-time inventory system is:
Multiple Choice
The primary advantage of a just-in-time inventory system is: Multiple Choice The amount of money tied up in inventory is minimized. O Customers are afforded a wider selection of merchandise available for immediate delivery. o The company is able to use the specific identification method of inventory pricing. ooo The risks of losing sales opportunities or of having to shut down manufacturing operations because of inventory shortages are minimized.
Requirement 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transacions in chronalogical order, calculating news inventory an hand balances ater each transaction Once all of the transacions have been entered into the perpetal record, caloulate the quantly and total oost of merchandise inventory purchased, sold, and on hand at the end...
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