Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Scrappers Supplies 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 annual accounting period, December 31. TIP: Although the purchases and sales are listed in chronological order, Scrappers determines the cost of goods sold after all of the purchases have occurred. Required: 1. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: (Round "Cost per Unit" to 2 decimal places.) a. Last-in, first-out. b. Weighted average cost c. First-in, first-out. d. Specific identification, assuming that the April 1 sale was selected one-fith from the beginning inventory and four-fiffis from the purchase of March 2. Assume that the sale of August 1 was selected from the purchase of June 30 . 2. Of the four methods, which will result in the highest gross profit? Which will result in the lowest income taxes? Complete this question by entering your answers in the tabs below. a. Compute the cost of goods avallable for sale, cost of ending inventory, and cost of goods sold at December 31 using the LIFo method. (Round "Cost per Unit" anwers to 2 decimal places.) a. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 using the LIFO method. (Round "Cost per Unit" anwers to 2 decimal places.) b. Compute the cost of goods avallable for sale, cost of ending inventory, and cost of goods sold at December 31 using the Weighted average method. (Round "Cost per Unit" anwers to 2 decimal places.) c. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 using the FIFO method. (Round "Cost per Unit" anwers to 2 decimal places.) d. Compute the cost of goods avallable for sale, cost of ending inventory, and cost of goods sold at December 31 using the Specific identification method. Assume that the April 1 sale was selected one-fift from the beginning inventory and four-fifths from the purchase of March 2. Assume that the sale of August 1 was selected from the purchase of June 30 . (Round "Cost per Unit" anwers to 2 decimal places.)

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

Personal Trainer Online Purchase Managerial Accounting

Authors: Carl S. Warren, James M. Reeve, Philip E. Fess

8th Edition

0324204604, 978-0324204605

More Books

Students also viewed these Accounting questions