Question
Wong's Trading Cards, Inc, had the following purchases in the month of April. Wong's Trading Card Inventory Purchases Date Activity Number of Units Cost per
Wong's Trading Cards, Inc, had the following purchases in the month of April.
| Date | Activity | Number of Units | Cost per Unit | Total Cost |
|---|---|---|---|---|
| 04/01 | Purchase | 2,000 | $10 | $20,000 |
| 04/10 | Purchase | 3,000 | $12 | $36,000 |
| 04/22 | Purchase | 1,500 | $16 | 24,000 |
Answer each of the following with FIFO, LIFO, or Weighted Average.
If Wong wants to maximize Net Income, which method of inventory valuation should they use?
If Wong wants to smooth out earnings by minimizing the fluctuations in COGS, which method of inventory valuation should they use?
If Wong wants to minimize their income tax obligation, which method of inventory valuation should they use?
If instead of trading cards, Wong was selling perishable items, like milk or fruits and vegetables, which inventory valuation method would be the most appropriate?
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
15th edition
978-1118159644, 9781118562185, 1118159640, 1118147294, 978-1118147290
