(ADOPTED) During the last quarter of the year, Ace Trading Company included Product X among the product lines it carries and sells. During the period, the following transactions related to Product X were made: Purchase Sale Purchase 100 units @ Php 100 90 units @ Php 150 150 units @ Php 120 120 units @ Php 180 60 units @ Php 150 Sale Purchase REQUIRED: A. Assuming Ace Trading Company uses perpetual inventory system, determine the ending inventory and cost of goods sold under each of the following costing methods: 1. FIFO 2. LIFO 3. Average

(ADOPTED) During the last quarter of the year, Ace Trading Company included Product X among the product lines it carries and sells. During the period, the following transactions related to Product X were made: Purchase Sale Purchase 100 units @ Php 100 90 units @ Php 150 150 units @ Php 120 120 units @ Php 180 60 units @ Php 150 Sale Purchase REQUIRED: A. Assuming Ace Trading Company uses perpetual inventory system, determine the ending inventory and cost of goods sold under each of the following costing methods: 1. FIFO 2. LIFO 3. Average

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 11E: Alternative Inventory Methods Nevens Company uses a periodic inventory system. During November, the...

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RE7-8 Johnson Company uses a perpetual inventory system. On October 23, Johnson purchased 100,000 of inventory on credit with payment terms of 1/15, net 45. Using the net price method, prepare journal entries to record Johnsons purchases on October 23 and the subsequent payment on October 31. Using the information from RE7-8, prepare journal entries to record Johnsons purchase on October 23 and the subsequent payment on November 30.
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Inventory Costing Methods Crandall Distributors uses a perpetual inventory system and has the following data available for inventory, purchases, and sales for a recent year. Required: 1. Compute the cost of ending inventory and the cost of goods sold using the specific identification method. Assume the ending inventory is made up of 40 units from beginning inventory, 30 units from Purchase 1, 80 units from Purchase 2, and 40 units from Purchase 3. 2. Compute the cost of ending inventory and cost of goods sold using the FIFO inventory costing method. 3. Compute the cost of ending inventory and cost of goods sold using the LIFO inventory costing method. 4. Compute the cost of ending inventory and cost of goods sold using the average cost inventory costing method. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.) 5. CONCEPTUAL CONNECTION Compare the ending inventory and cost of goods sold computed under all four methods. What can you conclude about the effects of the inventory costing methods on the balance sheet and the income statement?
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