Inventory Records Wiget Takin' onginal accountant acceed position with another form and left early March. You have done to review the worytary edge record for Widget Tek Inc.'s main product for March Inventory Date Quantity Unit Cost Total Cost Mart 250 100 581.100 1.27 SYS $121.125 M 650 590 563,700 Mar 11 325 198 $31,50 Mar 14 325 398 -531,850 700 $103 580,340 Hot 22 200 395 $25,460 Mat 25 260 $98 525,400 1,600 5158.400 999 Sudy the inventory record for Harch and answer the questions that forow. 1. Assuming that the product sells for $165 and that 85% of sales are on account determine the gross profit from sales for March 2. Makong the same assumptions (1), determine the ending inventory cost for March 3. W ich inwentory method is being used? LIFO Final Questions In conversation with the president of widget Tek Pne. you have learned that much of the company's inventory consists of older Widget tok tre models. These older models set for less than the newer Wideet Tek Inc. models, but customers strongly prefer the newer models. The company believes that the netrable value of the older Inventory is less than its value in the subsidiary inventory ledger Consione all of the information you have about widget To Inc, answer the following questione 1. To better account for the order wentary, the president of widget tok ine. wonders whether the inventory should be valued using a different method. Do you agree, and why or why not? Yes, because FIFOX will provide the highest gross profit x 2. Will change inventory method increase company net income on its financial statements? Yes, FIFO consistently vields higher net income. 3. When inventory not valed at cost? When costs are rising, LIFO smooth the cost changes Inventory Records Wiget Takin' onginal accountant acceed position with another form and left early March. You have done to review the worytary edge record for Widget Tek Inc.'s main product for March Inventory Date Quantity Unit Cost Total Cost Mart 250 100 581.100 1.27 SYS $121.125 M 650 590 563,700 Mar 11 325 198 $31,50 Mar 14 325 398 -531,850 700 $103 580,340 Hot 22 200 395 $25,460 Mat 25 260 $98 525,400 1,600 5158.400 999 Sudy the inventory record for Harch and answer the questions that forow. 1. Assuming that the product sells for $165 and that 85% of sales are on account determine the gross profit from sales for March 2. Makong the same assumptions (1), determine the ending inventory cost for March 3. W ich inwentory method is being used? LIFO Final Questions In conversation with the president of widget Tek Pne. you have learned that much of the company's inventory consists of older Widget tok tre models. These older models set for less than the newer Wideet Tek Inc. models, but customers strongly prefer the newer models. The company believes that the netrable value of the older Inventory is less than its value in the subsidiary inventory ledger Consione all of the information you have about widget To Inc, answer the following questione 1. To better account for the order wentary, the president of widget tok ine. wonders whether the inventory should be valued using a different method. Do you agree, and why or why not? Yes, because FIFOX will provide the highest gross profit x 2. Will change inventory method increase company net income on its financial statements? Yes, FIFO consistently vields higher net income. 3. When inventory not valed at cost? When costs are rising, LIFO smooth the cost changes
