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Following is partial information for the income statement of Audio Solutions Company under three different inventory costing methods, assuming the use of a periodic inventory system: Required: 1. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. 2. Prepare an income statement through pretax income for each method. Sales, 329 units; unit sales price, $54; Expenses, $1,600 3. Rank the three methods in order of income taxes paid (favorable cash flow). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. Note: Round intermediate calculations to 2 decimal places. Round your answers to the nearest whole Cost of goods sold Beginning inventory (398 units @ $25) Purchases (459 units @ $33) Goods available for sale Ending inventory (528 units) Cost of goods sold $ $ FIFO 9,950 $ 15,147 25,097 17,424 7,673 $ LIFO Average Cost 9,950 $ 15,147 25,097 13,200 11,897 $ 9,950 15,147 25,097 15,462 9,635

Following is partial information for the income statement of Audio Solutions Company under three different inventory costing methods, assuming the use of a periodic inventory system: Required: 1. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. 2. Prepare an income statement through pretax income for each method. Sales, 329 units; unit sales price, $54; Expenses, $1,600 3. Rank the three methods in order of income taxes paid (favorable cash flow). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. Note: Round intermediate calculations to 2 decimal places. Round your answers to the nearest whole Cost of goods sold Beginning inventory (398 units @ $25) Purchases (459 units @ $33) Goods available for sale Ending inventory (528 units) Cost of goods sold $ $ FIFO 9,950 $ 15,147 25,097 17,424 7,673 $ LIFO Average Cost 9,950 $ 15,147 25,097 13,200 11,897 $ 9,950 15,147 25,097 15,462 9,635

FINANCIAL ACCOUNTING
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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### E7-9 (Algo) Evaluating the Choice among Three Alternative Inventory Methods Based on Cash Flow Effects LO7-2, 7-3 Following is partial information for the income statement of Audio Solutions Company under three different inventory costing methods, assuming the use of a periodic inventory system: #### Required: 1. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. 2. Prepare an income statement through pretax income for each method. - Sales: 329 units - Unit sales price: $54 - Expenses: $1,600 3. Rank the three methods in order of income taxes paid (favorable cash flow). --- ### Required 1 #### Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. **Note:** Round intermediate calculations to 2 decimal places. Round your answers to the nearest whole dollar. | | FIFO | LIFO | Average Cost | |---|---|---|---| | **Cost of goods sold** | | | | | Beginning inventory (398 units @ $25) | $9,950 | $9,950 | $9,950 | | Purchases (459 units @ $33) | $15,147 | $15,147 | $15,147 | | **Goods available for sale** | $25,097 | $25,097 | $25,097 | | Ending inventory (528 units) | $17,424 | $13,200 | $15,462 | | **Cost of goods sold** | **$7,673** | **$11,897** | **$9,635** | ---
Transcribed Image Text:### E7-9 (Algo) Evaluating the Choice among Three Alternative Inventory Methods Based on Cash Flow Effects LO7-2, 7-3 Following is partial information for the income statement of Audio Solutions Company under three different inventory costing methods, assuming the use of a periodic inventory system: #### Required: 1. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. 2. Prepare an income statement through pretax income for each method. - Sales: 329 units - Unit sales price: $54 - Expenses: $1,600 3. Rank the three methods in order of income taxes paid (favorable cash flow). --- ### Required 1 #### Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. **Note:** Round intermediate calculations to 2 decimal places. Round your answers to the nearest whole dollar. | | FIFO | LIFO | Average Cost | |---|---|---|---| | **Cost of goods sold** | | | | | Beginning inventory (398 units @ $25) | $9,950 | $9,950 | $9,950 | | Purchases (459 units @ $33) | $15,147 | $15,147 | $15,147 | | **Goods available for sale** | $25,097 | $25,097 | $25,097 | | Ending inventory (528 units) | $17,424 | $13,200 | $15,462 | | **Cost of goods sold** | **$7,673** | **$11,897** | **$9,635** | ---
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