Inventory Costing MethodsPerpetual System (Appendix) The following information is available concerning Stillwater Inc.: Units Unit Cost Beginning
Question:
Inventory Costing Methods—Perpetual System (Appendix)
The following information is available concerning Stillwater Inc.:
Units Unit Cost Beginning inventory 200 $10 Purchases:
March 5 300 11 June 12 400 12 August 23 250 13 October 2 150 15 Stillwater, which uses a perpetual system, sold 1,000 units for $22 each during the year.
Sales occurred on the following dates:
Units February 12 150 April 30 200 July 7 200 September 6 300 December 3 150 Required 1. Calculate ending inventory and cost of goods sold for each of the following three methods:
a. Moving average
b. FIFO
c. LIFO 2. For each of the three methods, compare the results with those of Carter in Exercise 5-21. Which method gives a different answer depending on whether a company uses a periodic or a perpetual inventory system?
3. Assume the use of the perpetual system and an estimated tax rate of 30%. How much more or less (indicate which) will Stillwater pay in taxes by using LIFO instead of FIFO? Explain your answer.AppendixLO1
Step by Step Answer:
Using Financial Accounting Information The Alternative To Debits And Credits
ISBN: 9780538452748
7th Edition
Authors: Curtis L. Norton, Gary A. Porter