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data table

Data Table Date Item Quantity Unit Cost 15 $ 70 $ 75 50 $ 90 24 Mar 1 Balance 85 4 Purchase 12 Sale 22 Purchase 31 Sale Print Done

requirements

Requirements 1. Without resorting to calculations, determine which inventory method will result in PC, Inc., paying the lowest income taxes. 2. Prepare a perpetual inventory record using FIFO. 3. Prepare a perpetual inventory record using LIFO 4. Prepare a perpetual inventory record using average cost. Round average cost per unit to the nearest cent and all other amounts to the nearest dollar. Print Done

part 1

Requirement 1. Without resorting to calculations, determine which inventory method will result in PC, Inc., paying the lowest income taxes. In times of inventory prices, as is the case here, the Vmethod will result in PC, Inc., paying the lowest income taxes.

part 2

Requirement 2. Prepare a perpetual inventory record using FIFO

Start by entering the beginning inventory balances. 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 inventory​ purchased, sold, and on hand at the end of the period. For cost of goods​ sold, enter the first layer out under FIFO costing first. For inventory on​ hand, enter the oldest inventory layer​ first.

Purchases Cost of goods sold Inventory on hand Unit Total Unit Total Unit Total Date Qty Cost CostQty Cost Qty Cost Mar Mar 4 Mar 12 Mar 22 Mar 31 Total

part 3

Prepare a perpetual inventory record using LIFO. Start by entering the opening inventory balance. 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 inventory​ purchased, sold, and on hand at the end of the period. ​(For cost of goods​ sold, enter the first layer out under LIFO costing first. For inventory on​ hand, enter the oldest inventory layer​ first.)

Purchases Cost of goods sold Inventory on hand Unit Total Unit Total Unit Total Date Qty Cost CostQty Cost Cost Qty Cost Cost Mar Mar4 Mar 12 Mar 22 Mar 3 Total

part 5

Prepare a perpetual inventory record using average cost. Round average cost per unit to the nearest cent and all other amounts to the nearest dollar. Start by entering the opening inventory balance. 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 inventory​ purchased, sold, and on hand at the end of the period. ​(Round average cost per unit to the nearest cent and all other amounts to the nearest​ dollar.)

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Answer #1

The answer to Part 1 (fill in the blanks):

An explanation has been provided for the words that I have chosen and their relevance.

Answer to Part 2: FIFO Method

PART 2 Requirement 2 FIFO COGS Inventory balance Purchases Date Quantity Unit-Total Quantity Unit Total $ Quantity Unit $ Total $ 15 85 1,275 01-Mar 85 15 70 1,275 6,160 04-Mar 70 88 6,160 10 880 1,275 88 5,280 (70- 60) 15 85 12-Mar 60 (75-15) 880 10 50 22-Mar 50 90 4,500 90 4,500 880 10 14 31-Mar 901,260 36 903,240 (24-10) (50-14) 8,695 36 3,240 Totals 120 10,660 Inventory on hand $3,240

Explanation of amounts and quantities derived for FIFO Method:

In FIFO, we sell the oldest inventory first, hence when the sales of 75 units on 12th march, 15 units will go from the oldest inventory of 15 units and remaining 60 units from 70 units. When we made the sale of 24 units on 31st March, we sold the oldest units purchased - 10 units from the oldest inventory of 10 units and remainining 14 units from second oldest lot, consisting of total 50 units.

Answer to Part 3: LIFO Method:

PART 3 LIFO COGS Inventory balance Purchases Date Quantity Unit Total Quantity Unit Total $ Quantity Unit $ Total $ 15 85 1,275 01-Mar 1,275 6,160 85 15 70 04-Mar 70 88 6,160 70 6,160 10 85 850 12-Mar 5 85 425 (15-5) (75-70) 10 85 850 22-Mar 50 90 4,500 50 90 4,500 85 850 10 26 24 901 2,160 31-Mar 902,340 (50-24) 8,745 26 2,340 Totals 120 10,660 Inventory on hand $ 2,340

Explanation of amounts and quantities derived for LIFO Method:

In LIFO, we sell the newest purchases, so in the sale of 12th March, we sold the newest purchase we bought, which was total 70 units and the remaining from the second newest, which was 75-70 units = 5 units In LIFO, we sell the newest purchases, so in the sale of 31st March, we sold the newest purchase we bought, and we didnt consider the second newest as the first newest fulfilled the requirements for the units to be sold

Answer to Part 5: Average cost along with explanations for important calculations:

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