1. How much is the profit for year 2015 had the weighted average method been used? 2. How much is the profit for year 2016 had the weighted average method been used?
1. How much is the profit for year 2015 had the weighted average method been used? 2. How much is the profit for year 2016 had the weighted average method been used?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mahogany company was organized at the beginning of 2014 and used the FIFO method of inventory cost allocation. Profit reported under this method and inventories under both FIFO and weighted average methods are shown below:
2014 | 2015 | 2016 | |
Profit under FIFO. | $720,000 | $1,000,000 | $1,400,000 |
Inventory,end | |||
Weighted Average | 2,400,000 | 3,000,000 | 4,000,000 |
FIFO | 2,680,000 | 3,200,000 | 4,500,000 |
1. How much is the profit for year 2015 had the weighted average method been used?
2. How much is the profit for year 2016 had the weighted average method been used?
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