E6.4 (LO 2), AN On December 1, Kiyak Electronics Ltd. has three DVD players left in stock. All are identical, all are priced to sell at $150. One of the three DVD players left in stock, with serial #1012, was purchased on June 1 at a cost of $100. Another, with serial #1045, was purchased on November 1 for $88. The last player, serial #1056, was purchased on November 30 for $80. Instructions a. Calculate the cost of goods sold using the FIFO periodic inventory method assuming that two of the three players were sold by the end of December, Kiyak Electronics' year-end. b. If Kiyak Electronics used the specific identification method instead of the FIFO method, how might it alter its earnings by "selectively choosing" which particular players to sell to the two cus- tomers? What would Kiyak's cost of goods sold be if the company wished to minimize earnings? Maximize earnings? c. Which of the two inventory methods do you recommend that Kiyak use? Explain why. Calculate cost of goods sold using specific identification and FIFO.

E6.4 (LO 2), AN On December 1, Kiyak Electronics Ltd. has three DVD players left in stock. All are identical, all are priced to sell at $150. One of the three DVD players left in stock, with serial #1012, was purchased on June 1 at a cost of $100. Another, with serial #1045, was purchased on November 1 for $88. The last player, serial #1056, was purchased on November 30 for $80. Instructions a. Calculate the cost of goods sold using the FIFO periodic inventory method assuming that two of the three players were sold by the end of December, Kiyak Electronics' year-end. b. If Kiyak Electronics used the specific identification method instead of the FIFO method, how might it alter its earnings by "selectively choosing" which particular players to sell to the two cus- tomers? What would Kiyak's cost of goods sold be if the company wished to minimize earnings? Maximize earnings? c. Which of the two inventory methods do you recommend that Kiyak use? Explain why. Calculate cost of goods sold using specific identification and FIFO.

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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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

E6.4 (LO 2), AN On December 1, Kiyak Electronics Ltd. has three DVD players left in stock. All are
identical, all are priced to sell at $150. One of the three DVD players left in stock, with serial #1012, was
purchased on June 1 at a cost of $100. Another, with serial #1045, was purchased on November 1 for $88.
The last player, serial #1056, was purchased on November 30 for $80.
Instructions
a. Calculate the cost of goods sold using the FIFO periodic inventory method assuming that two of the
three players were sold by the end of December, Kiyak Electronics' year-end.
b. If Kiyak Electronics used the specific identification method instead of the FIFO method, how
might it alter its earnings by "selectively choosing" which particular players to sell to the two cus-
tomers? What would Kiyak's cost of goods sold be if the company wished to minimize earnings?
Maximize earnings?
c. Which of the two inventory methods do you recommend that Kiyak use? Explain why.
Calculate cost of goods sold using
specific identification and FIFO.

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