Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each

Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January 31. The inventorys selling price is $10 per unit.

Transactions Unit Cost Units Total Cost Inventory, January 1 $ 3.00 190 $ 570 Sale,

January 10 (160 ) Purchase,

January 12 3.50 240 840 Sale,

January 17 (140 ) Purchase,

January 26 4.50 70 315

Assuming that for Specific identification method (item 1d) the January 10 sale was from the beginning inventory and the January 17 sale was from the January 12 purchase.

Required: 1. Compute the cost of goods available for sale, ending inventory, and cost of goods sold at January 31 under each of the following inventory costing methods: (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)

2-a. Of the four methods, which will result in the highest gross profit?

Weighted average cost

First-in, first-out

Last-in,first-out

Specific identification

2-b. Of the four methods, which will result in the lowest income taxes?

Weighted average cost

First-in, first-out

Last-in, first-out

Specific identification

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

An effective presentation centres on the audience, discuss.

Answered: 1 week ago

Question

2. Are my sources up to date?

Answered: 1 week ago