E8-11(Compute FIFO and Average-Cost—Periodic) The following information is related to radios for the Couples Company for the month of July. (on picture below)Assuming that the periodic inventory method is used, compute the inventory cost at July 31 under each of the following cost flow assumptions. (Ignore taxes.)FIFO.Weighted-average.Answer the following questions.Which of the methods used above will yield the highest figure for gross profit for the income statement? Explain why.Which of the methods used above will yield the highest figure for ending inventory for the statement of financial position? Explain why. Date Transaction UnitsInUnitsCostTotalUnitsSoldSellingPriceTotalJuly 1 Balance100$4.10$4106 Purchase8004.303,4407 Sale300$7.00$ 2,10010 Sale3007.302,19012 Purchase4004.511,80415 Sale2007.401,48018 Purchase3004.601,38022 Sale4007.402,96025 Purchase5004.582,29030 Sale2007.501,500Totals2,100$9,3241,400$10,230

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Description: E8-11(Compute FIFO and Average-Cost—Periodic) The following information is related to radios for the Couples Company for the month of July. (on picture below)Assuming that the periodic inventory method is used, compute the inventory cost at July 31 u

Periodic inventory system: It involves the physical count of goods at specific interval of time.…

Answered: (Compute FIFO and…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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E8-11

(Compute FIFO and Average-Cost—Periodic) The following information is related to radios for the Couples Company for the month of July. (on picture below)

Assuming that the periodic inventory method is used, compute the inventory cost at July 31 under each of the following cost flow assumptions. (Ignore taxes.)
FIFO.
Weighted-average.
Answer the following questions.
Which of the methods used above will yield the highest figure for gross profit for the income statement? Explain why.
Which of the methods used above will yield the highest figure for ending inventory for the statement of financial position? Explain why.

Date Transaction Units
In
Units
Cost
Total
Units
Sold
Selling
Price
Total
July 1 Balance
100
$4.10
$
410
6 Purchase
800
4.30
3,440
7 Sale
300
$7.00
$ 2,100
10 Sale
300
7.30
2,190
12 Purchase
400
4.51
1,804
15 Sale
200
7.40
1,480
18 Purchase
300
4.60
1,380
22 Sale
400
7.40
2,960
25 Purchase
500
4.58
2,290
30 Sale
200
7.50
1,500
Totals
2,100
$9,324
1,400
$10,230

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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