Question
Inventory Costing MethodsPeriodic System The following information is available concerning the inventory of Carter Inc.: Units Unit Cost Beginning inventory 193 $10 Purchases: March 5
Inventory Costing MethodsPeriodic System
The following information is available concerning the inventory of Carter Inc.:
Units | Unit Cost | |
Beginning inventory | 193 | $10 |
Purchases: | ||
March 5 | 301 | 11 |
June 12 | 399 | 12 |
August 23 | 246 | 13 |
October 2 | 147 | 15 |
During the year, Carter sold 991 units. It uses a periodic inventory system.
Required:
1. Calculate ending inventory and cost of goods sold for each of the following three methods:
In your calculations round average unit cost to the nearest cent, and round all other calculations and your final answers to the nearest dollar.
Cost Flow Assumption | Ending Inventory | Cost of Goods Sold |
a. Weighted average | $fill in the blank 1 | $fill in the blank 2 |
b. FIFO | $fill in the blank 3 | $fill in the blank 4 |
c. LIFO | $fill in the blank 5 | $fill in the blank 6 |
2. Assume an estimated tax rate of 30%. How much more or less (indicate which) will Carter pay in taxes by using FIFO instead of LIFO?
Difference in taxes under FIFO vs. LIFO | $fill in the blank 7 |
Does this amount represent more or less taxes paid using FIFO? |
3. Assume that Carter prepares its financial statements in accordance with IFRS. Which costing method should it use to pay the least amount of taxes?
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