Dymac Appliances uses the periodic inventory system. Details regarding the inventory of appliances at November 1, 2015, purchases invoices during the next 12 months, and the inventory count at October 31, 2016, are summarized as follows:

Instructions
1. Determine the cost of the inventory on October 31, 2016, by the first-in, first-out method. Present data in columnar form, using the following headings:
Model _______Quantity ______Unit Cost _______Total Cost
If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase.
2. Determine the cost of the inventory on October 31, 2016, by the last-in, first-out method, following the procedures indicated in (1).
3. Determine the cost of the inventory on October 31, 2016, by the weighted average cost method, using the columnar headings indicated in (1).
4. Discuss which method (FIFO or LIFO) would be preferred for income tax purposes in periods of
(a) Rising prices and
(b) Declining prices.

Transcribed Image Text:

Purchases Involces Inventory Inventory Count, October 31 Model A10 B15 2nd 4 at $ 64 4 at $ 70 4 at $ 76 4 at 158 3 at 170 6 at 184 3 at 65 15 at 68 9 at 70 6at 250 5 260 10 at 259 10 at 246 16at 267 16 at 270 2at 110 3 a 128 3 at 130 4 at 170 4at 175 7 at 180 1st 8 at $176 3 at 75 7 at 242 12 at 240 2 at 108 5 at 160 15 Q70