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Alternative Inventory Methods Park Companys perpetual inventory records indicate the following transactions in the month of June: Units Cost/Unit Inventory, June 1 200 $3.20 Purchases:
Alternative Inventory Methods
Park Companys perpetual inventory records indicate the following transactions in the month of June:
Units | Cost/Unit | |
Inventory, June 1 | 200 | $3.20 |
Purchases: | ||
June 3 | 200 | 3.50 |
June 17 | 250 | 3.60 |
June 24 | 300 | 3.65 |
Sales: | ||
June 6 | 300 | |
June 21 | 200 | |
June 27 | 150 |
Required:
1. | Compute the cost of goods sold for June and the inventory at the end of June using each of the following cost flow assumptions: If required, round your answers to the nearest dollar. |
FIFO
Cost of Goods Sold | $ |
Ending Inventory | $ |
LIFO (Round your intermediate calculations and final answers to the nearest cent.)
Cost of Goods Sold | $ |
Ending Inventory | $ |
Average cost (In your computations, round new per unit costs to the nearest cent. Round your intermediate computations and final answers to the nearest dollar.)
Cost of Goods Sold | $ |
Ending Inventory | $ |
2. | Why are the cost of goods sold and ending inventory amounts different for each of the three methods? |
3. | produces the most realistic amount for net income because it |
produces the most realistic amount for ending inventory because it |
4. | If Park uses IFRS, which of the previous alternatives would be acceptable and why? |
The input in the box below will not be graded, but may be reviewed and considered by your instructor. | |
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