Question
Steve Company buys and sells one product. Its beginning inventory, purchases, and sales during calendar-year 2018 follow. DateUnits Acquired at Cost Sold at Retail Jan.1
Steve Company buys and sells one product. Its beginning inventory, purchases, and sales during calendar-year 2018 follow.
DateUnits Acquired at Cost Sold at Retail
Jan.1 Beg. inventory 400 units @ $14=$5,600
Jan.15Sale 200 units @ $30
Mar. 10 Purchase 200 units @ $15=$3,000
Apr.1Sale200 units @ $30
May9 Purchase 300 units @ $16=$4,800
Sep. 22 Purchase 250 units @ $20=$5,000
Nov.1 Sale 300 units @ $35
Nov. 28 Purchase 100 units @ $21=$2,100
Totals Units Available for Sale 1,250 units = $20,500Total Units Sold 700 units
Additional tracking data for specific identification: (1) January 15 sale200 units @ $14, (2) April 1 sale200 units @ $15, and (3) November 1 sale200 units @ $14 and 100 units @ $20.
Management wants a report that shows how changing from FIFO to another method would change net income. A table showing (1) the cost of goods sold amount under each of the four methods, (2) the amount by which each cost of goods sold total is different from the FIFO cost of goods sold, and (3) the effect on net income if another method is used instead of FIFO. Page 231
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