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)
COGS
2. Prepare an income statement through pretax income for each method.
Sales, 350 units; unit sales price, $50;
Expenses, $1,700
NEED HELP PREPARING INCOME STATEMENT
3. Rank the three methods in order of income taxes paid (favorable cash flow).
Homework Answers
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E7-9 Evaluating the Choice among Three Alternative Inventory
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inventory per physical count at December 31, current year, 1,800
units; sales, 8,200 units; sales price per unit, $75; and average
income tax rate, 30 percent.
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E7-8 Evaluating the Effects of Inventory Methods on Income from Operations, Income Taxes, and Net Income (Periodic) [LO 7-3) 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), S94,000; ending inventory per physical count at December 31, 1,000 units; sales price per unit, $75; and average income tax rate, 30%. Required: 1. Prepare income statements under the FIFO, LIFO, and weighted...
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Required information E7-7 (Algo) Analyzing and Interpreting the Financial Statement Effects of LIFO and FIFO LO7-2, 7-3 (The following information applies to the questions displayed below.] Emily Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2: Units 2,900 Unit Cost $13 Inventory, December 31, prior year For the current year: Purchase, April 11 Purchase, June 1 Sales ($53 each)...
e7-6 analyzing and interpreting the financial statement
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LO 7-3 an e') weighted average cost methods. E7-6 Analyzing and Interpreting the Financial Statement Effects of Periodic FIFO, LIFO, and Weighted Average Cost Onion Iron Corp. tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, as if it uses a periodic inventory system. Assum its accounting records provided the...
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Daniel Company uses a periodic inventory system. Data for the
current year: beginning merchandise inventory (ending inventory
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Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. (Do not round...
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