Air Force Surplus began July 2018 with 100 stoves that cost $10 each. During the month, the company made the following purchases at cost: (Click the icon to view the purchases.) The company sold 300 stoves, and at July 31, the ending inventory consisted of 70 stoves. The sales price of each stove was $48. Read the requirements. Requirement 1. Determine the cost of goods sold and ending inventory amounts for July under the average-cost, FIFO, and LIFO costing methods. Round the average cost per unit to two decimal places, and round all other amounts to the nearest dollar. Number of units Average cost Cost of goods sold Ending inventory Requirements - X 1. Determine the cost of goods sold and ending inventory amounts for July under the average-cost, FIFO, and LIFO costing methods. Round the average cost per unit to two decimal places, and round all other amounts to the nearest dollar. 2. Explain why cost of goods sold is highest under LIFO. Be specific. 3. Prepare the Air Force Surplus income statement for July. Report gross profit. Operating expenses totaled $4,250. The company uses average costing for inventory. The income tax rate is 32%. Data table July 6 18 26 Print 110 stoves @ 120 stoves @ 40 stoves @ $20= $25 = $30 = Done $ 2,200 3,000 1,200
Air Force Surplus began July 2018 with 100 stoves that cost $10 each. During the month, the company made the following purchases at cost: (Click the icon to view the purchases.) The company sold 300 stoves, and at July 31, the ending inventory consisted of 70 stoves. The sales price of each stove was $48. Read the requirements. Requirement 1. Determine the cost of goods sold and ending inventory amounts for July under the average-cost, FIFO, and LIFO costing methods. Round the average cost per unit to two decimal places, and round all other amounts to the nearest dollar. Number of units Average cost Cost of goods sold Ending inventory Requirements - X 1. Determine the cost of goods sold and ending inventory amounts for July under the average-cost, FIFO, and LIFO costing methods. Round the average cost per unit to two decimal places, and round all other amounts to the nearest dollar. 2. Explain why cost of goods sold is highest under LIFO. Be specific. 3. Prepare the Air Force Surplus income statement for July. Report gross profit. Operating expenses totaled $4,250. The company uses average costing for inventory. The income tax rate is 32%. Data table July 6 18 26 Print 110 stoves @ 120 stoves @ 40 stoves @ $20= $25 = $30 = Done $ 2,200 3,000 1,200
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Air Force Surplus began July 2018 with 100 stoves that cost $10 each. During the month, the company made the following purchases at cost:
(Click the icon to view the purchases.)
The company sold 300 stoves, and at July 31, the ending inventory consisted of 70 stoves. The sales price of each stove was $48.
Read the requirements.
Requirement 1. Determine the cost of goods sold and ending inventory amounts for July under the average-cost, FIFO, and LIFO costing methods. Round the average cost per unit to
two decimal places, and round all other amounts to the nearest dollar.
Number of units
Average cost
Cost of goods sold
Ending inventory
Requirements
1. Determine the cost of goods sold and ending inventory amounts for July under
the average-cost, FIFO, and LIFO costing methods. Round the average cost
per unit to two decimal places, and round all other amounts to the nearest
dollar.
2. Explain why cost of goods sold is highest under LIFO. Be specific.
3. Prepare the Air Force Surplus income statement for July. Report gross profit.
Operating expenses totaled $4,250. The company uses average costing for
inventory. The income tax rate is 32%.
Print
Done
X
Data table
July
6
18
26
Print
110 stoves @ $20
120 stoves @
40 stoves @
=
$25 =
$30 =
Done
$ 2,200
3,000
1,200
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