Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO, (2) LIFO, and (3) average?
In June, Plato Company reports the following for the month of June. Date Explanation Units Unit Cost Total Cost Jun 1 Inventory 225 $5 $1,125 Jun 12 Purchase 375 6 2,250 Jun 23 Purchase 500 7 3,500 Jun 30 Inventory 180 Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO, (2) LIFO, and (3) average cost. FIFO EI $ _____ FIFO COGS $ _______ LIFO EI $ _________ LIFO COGS $ ___________ Average Cost EI $ _______ Average Cost COGS $ ___________ 1. Which costing method gives the highest ending inventory______ ? 2. Which costing method gives the highest cost of goods sold_________ ? How do the average cost values for ending inventory and cost of goods sold relate to ending inventory and cost of goods sold for FIFO and LIFO? 3. For ending inventory, average cost is _______ than FIFO and___________ than LIFO. 4. For cost of goods sold, average cost is_____ than FIFO and________ than LIFO . 1 and 2 options are: Average cost, FIFO, or LIFO 3 and 4 options are: no difference, higher, or lower THANKS
Compute the ending inventory at September 30 using the FIFO and LIFO methods.?
AE6-4 Snoslope sells a snowboard, Xpert, that is popular with snowboard enthusiasts. Below is information relating to Snoslope's purchases of Xpert snowboards during September. During the same month, 118 Xpert snowboards were sold. Snoslope uses a periodic inventory system. Date Explanation Units Unit Cost Total Cost Sept. 1 Inventory 14 $88 $1,232 Sept. 12 Purchases 45 102 4,590 Sept. 19 Purchases 20 104 2,080 Sept. 26 Purchases 50 111 5,550 Totals 129 $13,452 (a) Compute the ending inventory at September 30 using the FIFO and LIFO methods. FIFO Ending Inventory $ LIFO Ending Inventory $ (b) For both FIFO and LIFO, calculate the sum of ending inventory and cost of goods sold. FIFO COGS $ LIFO COGS $ FIFO COGS + Ending Inventory $ LIFO COGS + Ending Inventory $
Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO, (2) LIFO, and (3) average?
You're using the periodic system here. Date Explanation Units Unit Cost Total Cost June 1 Inventory 225 $ 5 1,125 June 12 Purchases 375 6 2,250 June 23 Purchases 500 7 3,500 Total units available 1,100 units for $6,875, i.e. ave. cost is $6.25 each June 30 Inventory 180, i.e. 920 units were sold (1) FIFO ending inventory: 180 units @ $7 = $1,260 COGS: $6,875 - $1,260 = $5,615 (2) LIFO ending inventory: 180 units @ $5 = $900 COGS: $6,875 - $900 = $5,975 (3) average ending inventory: 180 units @ $6.25 = $1,125 COGS: $6,875 - $1,125 = $5,750
FIFO, LIFO, and Average Cost?
Naab Inc. uses a periodic inventory system. Its records show the following for the month of May, in which 78 units were sold. Date Explanation Units Unit Cost Total Cost May 1 Inventory 30 $9 $270 May 15 Purchase 25 10 250 May 24 Purchase 40 11 440 Total 95 $960 Calculate the ending inventory at May 31 using the (a) FIFO, (b) average-cost, and (c) LIFO methods. (Round all answers to 0 decimal places, e.g. 2,555. For average cost computations round the per unit cost to 3 decimal places, e.g. 2.550.) FIFO $ 187 Average-cost ? LIFO $ 153 Calculate the amount allocated to cost of goods sold under each method. FIFO $ 773 Average-cost ? LIFO $ 807
Given the following data, calculate the cost of ending inventory using the LIFO costing method, and the Period?
periodic inventory system 1/1Beginninginventory 100unitsat $10perunit 3/2Purchases 50unitsat $11perunit 5/8Purchases 80unitsat $10perunit 8/7Purchases 30unitsat $12perunit 12/31Endinginventory 80units
What is an opening inventory and a closing inventory in accounting?
For a going concern enterprise, opening inventory is normally a brought down value from the just closed accounting period. This implies that inventory measurement (opening and closing) is a sort of a cycle in enterprises. All the same, closing inventory is normally measured at the lesser of cost and net realizable value. This means that closing inventory can be adjusted accordingly, with the adjustment value being written off to cost of sales. Fundamentally, opening inventory is not adjustable since this would significantly impact on closing/opening ledger balances, which would conflict and contradict accounts reporting. On the other hand, closing inventory is also an asset account recorded under current assets. But you will notice that there is no mention of opening inventory in the balance sheet. The objective of opening inventory is to provide the onset for determination of cost of goods sold for an accounting period. It is also used to compute average inventory.
Why do inventory write-downs raise COGS?
Inventory write downs raise your COGs because you never actually received payment for said goods. Just because you write them down doesn't mean you don't have to pay for them in the beginning.When you purchased said goods they cost “x”. Say you successfully sold all of the goods and received your full profit which is “y”.Next quarter you “wrote down” 1/5 of “x”. Which essentially means you made no money from 1/5 of your inventory of the goods priced at “x”. So at the end of the quarter when you calculate you take “x” - 1/5 of “y” which equals “z”. Z = the amount of money it cost you to write down the wasted goods.Rarely if ever will a supplier credit you for “z” because once you paid for the goods from them, truly it's up to you to sell them. If you waste or write down or write off anything, there's your problem. Time to get to the root cause of your waste/write downs and control those to maximize “y”.
How would profits of a company changes if inventory accounting changes from FIFO to weighted average method?
Moving from FIFO to Weighted Average in a time of decreasing prices would help lower the Cost allocated to COGS and hence add to profit and increase the value of Inventtory by a corresponding value. The reverse will happen in case there is a steady price inflation at play. However, this is a simplistic derivation; what would queer the logic could be the size of Inventory held prior to changing the method, if the old price Inventory and new price Inventory are evenly split and the Prices are very divergent, then the switch will have a serious impact. These situations are not a lasting effect and will not impress a long-term investor unless the move is justified on grounds of improving the ‘true and fair’ edicts of financial reporting.