E7-22 (Algo) (Supplement B) FIFO and LIFO Cost of Goods Sold under Periodic versus Perpetual Inventory Systems Assume that a retailer's beginning inventory and purchases of a popular item during January included (1) 500 units at $9.00 in beginning inventory on January 1, (2) 650 units at $10.00 purchased on January 8, and (3) 950 units at $11.00 purchased on January 29. The company sold 550 units on January 12 and 750 units on January 30. Required: 1. Calculate the cost of goods sold for the month of January under (a) FIFO (periodic calculation), (b) FIFO (perpetual calculation), (c) LIFO (periodic calculation), and (d) LIFO (perpetual calculation). 2. Which cost flow assumption and calculation approach would you recommend to management in order to save taxes? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the cost of goods sold for the month of January under (a) FIFO (periodic calculation), (b) FIFO (perpetual calculation), (c) LIFO (periodic calculation), and (d) LIFO (perpetual calculation). Cost of Goods Sold a. FIFO (periodic calculation) b. FIFO (perpetual calculation) c. LIFO (periodic calculation) d. LIFO (perpetual calculation) < Required 1 Required 2 >

Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter5: Inventories And Cost Of Goods Sold
Section: Chapter Questions
Problem 5.12AMCP
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E7-22 (Algo) (Supplement B) FIFO and LIFO Cost of Goods Sold under Periodic versus Perpetual
Inventory Systems
Assume that a retailer's beginning inventory and purchases of a popular item during January included (1) 500 units at $9.00 in
beginning inventory on January 1, (2) 650 units at $10.00 purchased on January 8, and (3) 950 units at $11.00 purchased on January
29. The company sold 550 units on January 12 and 750 units on January 30.
Required:
1. Calculate the cost of goods sold for the month of January under (a) FIFO (periodic calculation), (b) FIFO (perpetual calculation), (c)
LIFO (periodic calculation), and (d) LIFO (perpetual calculation).
2. Which cost flow assumption and calculation approach would you recommend to management in order to save taxes?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Calculate the cost of goods sold for the month of January under (a) FIFO (periodic calculation), (b) FIFO (perpetual
calculation), (c) LIFO (periodic calculation), and (d) LIFO (perpetual calculation).
Cost of Goods Sold
a. FIFO (periodic calculation)
b. FIFO (perpetual calculation)
c. LIFO (periodic calculation)
d. LIFO (perpetual calculation)
< Required 1
Required 2 >
Transcribed Image Text:E7-22 (Algo) (Supplement B) FIFO and LIFO Cost of Goods Sold under Periodic versus Perpetual Inventory Systems Assume that a retailer's beginning inventory and purchases of a popular item during January included (1) 500 units at $9.00 in beginning inventory on January 1, (2) 650 units at $10.00 purchased on January 8, and (3) 950 units at $11.00 purchased on January 29. The company sold 550 units on January 12 and 750 units on January 30. Required: 1. Calculate the cost of goods sold for the month of January under (a) FIFO (periodic calculation), (b) FIFO (perpetual calculation), (c) LIFO (periodic calculation), and (d) LIFO (perpetual calculation). 2. Which cost flow assumption and calculation approach would you recommend to management in order to save taxes? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the cost of goods sold for the month of January under (a) FIFO (periodic calculation), (b) FIFO (perpetual calculation), (c) LIFO (periodic calculation), and (d) LIFO (perpetual calculation). Cost of Goods Sold a. FIFO (periodic calculation) b. FIFO (perpetual calculation) c. LIFO (periodic calculation) d. LIFO (perpetual calculation) < Required 1 Required 2 >
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