Inventory Valuation Turnbell Manufacturing held no inventory at the beginning of March. Inventory purchases by the company
Question:
Inventory Valuation Turnbell Manufacturing held no inventory at the beginning of March. Inventory purchases by the company during March were as follows:
Turnbell uses a periodic inventory system. At the end of March, the company had 10,000 units of inventory on hand.
a. Compute cost of goods sold for March using an average cost flow assumption.
b. Compute cost of goods sold for March using a first-in, first-out cost flow assumption.
c. Compute cost of goods sold for March using a last-in, first-out cost flow assumption.
d. Which inventory cost flow assumption results in the greatest net income for March? Which results in the smallest?
e. Which inventory cost flow assumption results in the largest inventory balance at March 31? Which results in the smallest balance?
f. If Turnbell was not restricted to using the same inventory costing method for both income tax and financial reporting, which methods should it use? Explain why.
Step by Step Answer:
Financial Accounting A Decision Making Approach
ISBN: 9780471328230
2nd Edition
Authors: Thomas E. King, Valdean C. Lembke, John H. Smith