Question
Shanrock Company uses the periodic inventory method and had the following inventory information available: Units Unit Cost Total Cost 1/1 Beginning Inventory 100 $4 $400
Shanrock Company uses the periodic inventory method and had the following inventory information available:
| Units | Unit Cost | Total Cost | ||
| 1/1 | Beginning Inventory | 100 | $4 | $400 |
| 1/20 | Purchase | 400 | $6 | 2,400 |
| 7/25 | Purchase | 200 | $7 | 1,400 |
| 10/20 | Purchase | 300 | $8 | 2,400 |
| 1,000 | $6,600 |
A physical count of inventory on December 31 revealed that there were 400 units on hand.
Answer the following independent questions.
| 1. | Assume that the company uses the FIFO method. The value of the ending inventory at December 31 is | $ |
| 2. | Assume that the company uses the Average-Cost method. The value of the ending inventory on December 31 is | $ |
| 3. | Assume that the company uses the LIFO method. The value of the ending inventory on December 31 is | $ |
| 4. (a) | Determine the difference in the amount of income that the company would have reported if it had used the FIFO method instead of the LIFO method. | $ |
| 4. (b) | Would income have been greater or less? |
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Accounting
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett
9th edition
1118608224, 1118608227, 730323994, 9780730323990, 730319172, 9780730319177, 978-1118608227
