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
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When costs to purchase inventory are falling over time, using LIFO leads to reporting lower cost of goods sold and higher net income than FIFO. Multiple Choice lower, lower higher; higher
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When costs to purchase inventory are falling over time, using
LIFO leads to reporting ______ cost...
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...
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...
ACCOUNTING Check Your 5 & 6 Question 6 (of 20) 6. When costs are rising over...
ACCOUNTING Check Your 5 & 6 Question 6 (of 20) 6. When costs are rising over time: O FIFO results in higher profits than LIFO O LIFO results in higher profits that FiFO. O Cost of goods sold using the weighted average method wel loe greater than LIFO cost of goods sold O ending inventory balances will be greater under LIFO
In a period of steadily rising prices (meaning the cost to purchase inventory is increasing over time), what would be th...
In a period of steadily rising prices (meaning the cost to purchase inventory is increasing over time), what would be the implications of choosing FIFO vs. LIFO? Which method would show a higher net income, and which would show a lower net income? Which method does a better job of matching expenses and revenues? Which method reflects the most recent costs of inventory on the balance sheet? What implications might this have that would be relevant for users of the...
Comparing Inventory Methods Assume that a firm separately determined inventory under FIFO and LIFO and then...
Comparing Inventory Methods Assume that a firm separately determined inventory under FIFO and LIFO and then compared the results. a. In each dropdown that follows, select the correct sign [less than (<), greater than (>), or equal (=)] for each comparison, assuming periods of rising prices. 1. FIFO inventory LIFO inventory 2. FIFO cost of merchandise sold LIFO cost of merchandise soldd 3. FIFO net income LIFO net income 4. FIFO income taxes LIFO income taxes b. Why would management...
Blossom Company uses the LIFO method for financial reporting purposes but FIFO for internal reporting purposes....
Blossom Company uses the LIFO method for financial reporting purposes but FIFO for internal reporting purposes. At January 1, 2020, the LIFO reserve has a credit balance of $1,387.700. At December 31, 2020, Blossom's internal reports indicated that the FIFO inventory balance was $2.875,500 and for external reporting purposes the LIFO inventory balance was $1,390,400. (a) What is the amount of the LIFO reserve and the LIFO effect related to 2020? LIFO reserve at December 31, 2020 $ LIFO effect...
Exercise 5.18 LO 7,8 LIFO versus FIFO-impact on ROI Mannisto Inc. uses the FIFO inventory cost...
Exercise 5.18 LO 7,8 LIFO versus FIFO-impact on ROI Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $1,500,000 and average assets of $10,000,000. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $300,000 more than under FIFO, and its average assets would have been $300,000 less than under FIFO. Required: a. Calculate the...
when using FIFO costing during inflationary time period, will the cost of goods be higher or...
when using FIFO costing during inflationary time period, will the cost of goods be higher or lower than when using LILO and how would it affect net income? Higher or lower?
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...
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...
ACCOUNTING Check Your 5 & 6 Question 6 (of 20) 6. When costs are rising over time: O FIFO results in higher profits than LIFO O LIFO results in higher profits that FiFO. O Cost of goods sold using the weighted average method wel loe greater than LIFO cost of goods sold O ending inventory balances will be greater under LIFO
Blossom Company uses the LIFO method for financial reporting purposes but FIFO for internal reporting purposes. At January 1, 2020, the LIFO reserve has a credit balance of $1,387.700. At December 31, 2020, Blossom's internal reports indicated that the FIFO inventory balance was $2.875,500 and for external reporting purposes the LIFO inventory balance was $1,390,400. (a) What is the amount of the LIFO reserve and the LIFO effect related to 2020? LIFO reserve at December 31, 2020 $ LIFO effect...
Exercise 5.18 LO 7,8 LIFO versus FIFO-impact on ROI Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $1,500,000 and average assets of $10,000,000. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $300,000 more than under FIFO, and its average assets would have been $300,000 less than under FIFO. Required: a. Calculate the...
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...
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