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7 During a period of steadily rising prices, which one of the following inventory valuation methods is likely to result in the highest cost of goods sold? a Weighted average cost FIFO LIFO d Specific Identification

7 During a period of steadily rising prices, which one of the following inventory valuation methods is likely to result in the highest cost of goods sold? a Weighted average cost FIFO LIFO d Specific Identification

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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7 During a period of steadily rising prices, which one of the following inventory valuation methods is likely to result in the highest cost of goods sold? a Weighted average cost FIFO LIFO d Specific Identification 8 Ace Systems, Inc. uses a perpetual inventory system. The company's beginning inventory of a particular product and its purchases during the month of January were as follows: Unit Cost Total Cost $27.50 $28.00 $29.00 Quantity 10 Beginning inventory (1 Jan.). Purchase (15 Jan.) Purchase (23 Jan.) $275 $420 $145 15 5 On 28 January, Ace Systems sells 18 units. Refer to above data. Assuming that Ace Systems uses the weighted average cost. flow assumption, the cost of goods sold to be recorded at 28 January is: $504. b $336. A S. $499. d Some other amount. B Refer to above data. Assuming that Ace Systems uses the FIFO cost flow assumption, the cost of goods sold on 28 January is: $509 $341 с $499 b d Some other amount. C Refer to above data. Assuming that Ace Systems uses the LIFO cost flow assumption, the 12 units of this product in inventory at 31 January have a total cost of $499 $331 $509 b d Some other amount.
Transcribed Image Text:7 During a period of steadily rising prices, which one of the following inventory valuation methods is likely to result in the highest cost of goods sold? a Weighted average cost FIFO LIFO d Specific Identification 8 Ace Systems, Inc. uses a perpetual inventory system. The company's beginning inventory of a particular product and its purchases during the month of January were as follows: Unit Cost Total Cost $27.50 $28.00 $29.00 Quantity 10 Beginning inventory (1 Jan.). Purchase (15 Jan.) Purchase (23 Jan.) $275 $420 $145 15 5 On 28 January, Ace Systems sells 18 units. Refer to above data. Assuming that Ace Systems uses the weighted average cost. flow assumption, the cost of goods sold to be recorded at 28 January is: $504. b $336. A S. $499. d Some other amount. B Refer to above data. Assuming that Ace Systems uses the FIFO cost flow assumption, the cost of goods sold on 28 January is: $509 $341 с $499 b d Some other amount. C Refer to above data. Assuming that Ace Systems uses the LIFO cost flow assumption, the 12 units of this product in inventory at 31 January have a total cost of $499 $331 $509 b d Some other amount.
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