Based on the following data, make a comparison between the use of the flow of inventory costs assumptions with the FIFO and LIFO methods and provide an overview of why in the end LIFO should not be used. (on the image below)Create Schedules of COGS using the following format:(replace XXX with the correct number from your calculation) ScheduleSales ($5 per unit)СOGSGross Margin$Sch 1$$200,000$128,50071,500Sch 2200,000$125,000$75,000Calculation COGSUnitsCost per unitTotal CostBeginning Inventory, jan 1Purchase, Jan 10Purchase, Jan 3012,000$3.00$36,0009,000$3.20$28,8009,000$3.25$29,250Purchase, Feb 1111,000$3.30$36,300Purchase, March 1712,000$3.40$40,800 XYZ CompanySchedules of COGSFor November Schedule 2020Schedule 1Schedule 2FIFOLIFOBeginning Inventory$ XXXSxxPlus: PurchasesXXXXXXCOGS for salesless: Ending inventoryXXXXXXXXXXXXCOGSXXXXXXSchedules Computing Ending InventoryBeginning InventoryPlus: PurchasesUnit available for saleless: SalesEnding inventoryUnitsXXXХххXxxХххXXXCalculation for two assumptionFIFO (SCH 1)12,0004.4052,8003,0004.3012,90065,700LIFO (SCH 2)10,0004.0040,0005,0004.2021,00061,000

Name: Based on the following data, make a comparison between the use of the
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Description: Based on the following data, make a comparison between the use of the flow of inventory costs assumptions with the FIFO and LIFO methods and provide an overview of why in the end LIFO should not be used. (on the image below)Create Schedules of COGS u

Answered: Based on the following data, make a…

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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Based on the following data, make a comparison between the use of the flow of inventory costs assumptions with the FIFO and LIFO methods and provide an overview of why in the end LIFO should not be used. (on the image below)

Create Schedules of COGS using the following format:
(replace XXX with the correct number from your calculation)

Schedule
Sales ($5 per unit)
СOGS
Gross Margin
$
Sch 1
$
$
200,000
$
128,500
71,500
Sch 2
200,000
$
125,000
$
75,000
Calculation COGS
Units
Cost per unit
Total Cost
Beginning Inventory, jan 1
Purchase, Jan 10
Purchase, Jan 30
12,000
$
3.00
$
36,000
9,000
$
3.20
$
28,800
9,000
$
3.25
$
29,250
Purchase, Feb 11
11,000
$
3.30
$
36,300
Purchase, March 17
12,000
$
3.40
$
40,800

XYZ Company
Schedules of COGS
For November Schedule 2020
Schedule 1
Schedule 2
FIFO
LIFO
Beginning Inventory
$ XXX
Sxx
Plus: Purchases
XXX
XXX
COGS for sales
less: Ending inventory
XXX
XXX
XXX
XXX
COGS
XXX
XXX
Schedules Computing Ending Inventory
Beginning Inventory
Plus: Purchases
Unit available for sale
less: Sales
Ending inventory
Units
XXX
Ххх
Xxx
Ххх
XXX
Calculation for two assumption
FIFO (SCH 1)
12,000
4.40
52,800
3,000
4.30
12,900
65,700
LIFO (SCH 2)
10,000
4.00
40,000
5,000
4.20
21,000
61,000

Expert Solution

Step 1

FIFO: Under this method, the inventory that is bought first is to be sold first. Thus the ending inventory will have the latest bought goods.

LIFO: In last in last out method, the goods which are bought latest are to be sold first. Ending inventory would have the earlier purchased goods.

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