E7-15 (Algo) Analyzing and Interpreting the Effects of the LIFO/FIFO Choice on Inventory Turnover Rat LO7-5, 7-6 The records at the end of January of the current year for Young Company showed the following for a particular kind of merchandise. Beginning Inventory at FIFO: 16 Units @ $19 = $304 Beginning Inventory at LIFO: 16 Units @ $15 = $240 January Transactions Purchase, January 9 Purchase, January 20 Sale, January 21 (at $39 per unit) Sale, January 27 (at $40 per unit) Units 28 50 36 26 Unit Cost $17 22 Total Cost $ 476 1,100 Required: 1. Compute the inventory turnover ratio for the month of January under the FIFO and LIFO inventory costing methods. 2. Which costing method is the more accurate indicator of the efficiency of inventory management?

E7-15 (Algo) Analyzing and Interpreting the Effects of the LIFO/FIFO Choice on Inventory Turnover Rat LO7-5, 7-6 The records at the end of January of the current year for Young Company showed the following for a particular kind of merchandise. Beginning Inventory at FIFO: 16 Units @ $19 = $304 Beginning Inventory at LIFO: 16 Units @ $15 = $240 January Transactions Purchase, January 9 Purchase, January 20 Sale, January 21 (at $39 per unit) Sale, January 27 (at $40 per unit) Units 28 50 36 26 Unit Cost $17 22 Total Cost $ 476 1,100 Required: 1. Compute the inventory turnover ratio for the month of January under the FIFO and LIFO inventory costing methods. 2. Which costing method is the more accurate indicator of the efficiency of inventory management?

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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