Question
Bitten Companys inventory records show 604 units on hand on October 1 with a unit cost of $5 each. The following transactions occurred during the
Bitten Companys inventory records show 604 units on hand on October 1 with a unit cost of $5 each. The following transactions occurred during the month of October:
Date | Unit Purchases | Unit Sales |
October 4 | 494 @ $12.00 | |
October 8 | 794 @ $5.39 | |
October 9 | 703 @ $12.00 | |
October 18 | 707 @ $5.67 | |
October 20 | 808 @ $13.00 | |
October 29 | 810 @ $5.93 |
All expenses other than cost of goods sold amount to $3,036 for the month. The company uses an estimated tax rate of 30% to accrue monthly income taxes.
Required:
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1. Prepare a chart comparing cost of goods sold and ending inventory using the periodic system and the following costing methods. In your calculations round weighted average unit cost to three decimal places and round all other calculations and your final answers to the nearest dollar.
Inventory System | Cost of Goods Sold | Ending Inventory | Total |
Weighted average | $fill in the blank 3bdc0c04a04100c_1 | $fill in the blank 3bdc0c04a04100c_2 | $fill in the blank 3bdc0c04a04100c_3 |
FIFO | fill in the blank 3bdc0c04a04100c_4 | fill in the blank 3bdc0c04a04100c_5 | fill in the blank 3bdc0c04a04100c_6 |
LIFO | fill in the blank 3bdc0c04a04100c_7 | fill in the blank 3bdc0c04a04100c_8 | fill in the blank 3bdc0c04a04100c_9 |
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2. What does the Total column represent?
Beginning inventoryCost of goods available for saleGross marginNet salesPurchasesCost of goods available for sale
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3. Prepare income statements for each of the three methods. When required, round your answers to the nearest dollar.
Weighted Average | FIFO | LIFO | |
CashIncome before taxesIncome tax expenseOperating expensesSales | $- Select - | $- Select - | $- Select - |
Cost of goods available for saleCost of goods soldDepreciation expenseGross profitOperating expenses | - Select - | - Select - | - Select - |
Cost of goods available for saleGross profitIncome before taxesNet incomeNet sales | $- Select - | $- Select - | $- Select - |
Cost of goods soldIncome before taxesOperating expensesSales DiscountsSales | - Select - | - Select - | - Select - |
CashCost of goods soldIncome before taxesNet lossSales returns and allowances | $- Select - | $- Select - | $- Select - |
Cost of goods soldIncome before taxesIncome tax expenseOperating expensesSales | - Select - | - Select - | - Select - |
Cost of goods available for saleCost of goods soldNet incomeNet lossTotal assets | $- Select - | $- Select - | $- Select - |
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4. Will the company pay more or less tax if it uses FIFO rather than LIFO?
Cannot determine from information providedLess taxesMore taxesSame amount of taxesMore taxes
How much more or less? $fill in the blank df625702600a02a_2
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