Comparison of Inventory Costing Methods-Periodic System Bitten Company's inventory records show 603 units on hand on October 1 with a unit cost of $5 each. The following transactions occurred during the month of October: Date October 4 October 8 October 9 Unit Purchases 791 @ $5.41 FIFO LIFO Unit Sales 694 $5.89 507 @ $10.00 October 18 October 20 October 29 796 @ $5.86 All expenses other than cost of goods sold amount to $3,050 for the month. The company uses an estimated tax rate of 30% to accrue monthly income taxes. Required: 696 @ $10.00 797 @ $11.00 1. Prepare a chart comparing cost of goods sold and ending inventory using the periodic system and the following costing methods. In your calculations round weighted average unit cost to three decimal places and round all other calculations and your final answers to the nearest dollar. Bitten Company Comparison for Cost of Goods Sold and Ending Inventory Using the Periodic System For Weighted Average, FIFO and LIFO Cost Methods Inventory System Cost of Goods Sold Ending Inventory Total Weighted average $ X
Comparison of Inventory Costing Methods-Periodic System Bitten Company's inventory records show 603 units on hand on October 1 with a unit cost of $5 each. The following transactions occurred during the month of October: Date October 4 October 8 October 9 Unit Purchases 791 @ $5.41 FIFO LIFO Unit Sales 694 $5.89 507 @ $10.00 October 18 October 20 October 29 796 @ $5.86 All expenses other than cost of goods sold amount to $3,050 for the month. The company uses an estimated tax rate of 30% to accrue monthly income taxes. Required: 696 @ $10.00 797 @ $11.00 1. Prepare a chart comparing cost of goods sold and ending inventory using the periodic system and the following costing methods. In your calculations round weighted average unit cost to three decimal places and round all other calculations and your final answers to the nearest dollar. Bitten Company Comparison for Cost of Goods Sold and Ending Inventory Using the Periodic System For Weighted Average, FIFO and LIFO Cost Methods Inventory System Cost of Goods Sold Ending Inventory Total Weighted average $ X
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Comparison of Inventory Costing Methods-Periodic System
Bitten Company's inventory records show 603 units on hand on October 1 with a unit cost of $5 each. The following transactions occurred during the month of October:
Date
October 4
October 8
October 9
October 18
October 20
October 29
Unit Purchases
791 @ $5.41
694 @ $5.89
Unit Sales
507 @ $10.00
696 @ $10.00
Inventory System Cost of Goods Sold
Weighted average $
X
FIFO
LIFO
797 @ $11.00
796 @ $5.86
All expenses other than cost of goods sold amount to $3,050 for the month. The company uses an estimated tax rate of 30% to accrue monthly income taxes.
Required:
1. Prepare a chart comparing cost of goods sold and ending inventory using the periodic system and the following costing methods. In your calculations round weighted average unit cost to three decimal places and round all other calculations
and your final answers to the nearest dollar.
Bitten Company
Comparison for Cost of Goods Sold and Ending Inventory Using
the Periodic System
For Weighted Average, FIFO and LIFO Cost Methods
Ending Inventory Total
Q00
Expert Solution
Explanation -
Inventory Valuation Methods are methods of valuation of inventory.
There are three methods of inventory valuation - FIFO, LIFO, and Weighted Average.
1. FIFO Method -
Under FIFO Method, Inventory purchased first is sold first.
2. LIFO Method -
Under LIFO Method, Inventory purchased last is sold first.
3. Weighted Average -
Under the Weighted Average Method, the cost is considered to be average at the time of sale.
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