Question
Page 273; BTN 6-6 Using the following data, each expert team must collaborate to develop a presentation that illustrates the relevant concepts and procedures for
Page 273; BTN 6-6
Using the following data, each expert team must collaborate to develop a presentation that illustrates the relevant concepts and procedures for its inventory method - I need a LIFO method.
Data
The company uses a perpetual inventory system. It had the following beginning inventory and current year purchases of its product.
Jan. 1 | Beginning inventory | 50 units@$100 | = $5,000 |
Jan. 14 | Purchase | 150 units@$120 | = $18,000 |
Apr. 30 | Purchase | 200 units@$150 | = $30,000 |
Sept. 26 | Purchase | 300 units@$200 | = $60,000 |
The company transacted sales on the following dates at a $350 per unit sales price.
Jan. 10 | 30 units | (Specific cost: 30 @ $100) |
Feb. 15 | 100 units | (Specific cost: 100 @ $120) |
Oct. 5 | 350 units | (Specific cost: 100 @ $150 and 250 @ $200) |
3a) Identify and compute the costs to assign to the units sold. (Round per unit costs to three decimals.)
3b) Identify and compute the costs to assign to the units in ending inventory. (Round inventory balances to the dollar.)
3c) How likely is it that this inventory costing method will reflect the actual physical flow of goods
How relevant is that factor in determining whether this an acceptable method to use?
3d) What is the impact of this method versus others in determining net income and income taxes?
3e) How closely does the ending inventory amount reflect replacement cost?
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