The image is a spreadsheet displaying inventory costing methods, particularly focusing on FIFO (First-In, First-Out). It includes tables and a financial summary.### Inventory Costing Methods#### Cost of Goods Sold- **Date:** Various dates in May.- **Item transactions:** - **1 May:** Beginning Inventory - 300 units at $17 each, Total $5,100.00 - **8 May Purchase:** 42 units at $19 each, Total $798.00 - **10 May Purchase:** 28 units at $20 each, Total $560.00 - **20 May Purchase:** 50 units at $22 each, Total $1,100.00#### FIFO Method- **Sold 135 Units @ $37 each:** - Total sales: Calculated for understanding cost flow.#### Income StatementThis section is highlighted in green:- **Sales:** - $1,400.00- **Cost of Goods Sold:** - Not explicitly stated.- **Gross Profit:** - The amount is not detailed but indicated by a border in the income statement section.- **Operating Expenses:** - Not specified.- **Net Income:** - Indicated with a line and assumed to be derived from the detailed figures.#### Additional Details- **Ending Inventory:** - Date of transactions and details of quantity and cost per unit. This document demonstrates how the FIFO method impacts financial statements by prioritizing inventory costs based on purchase date, affecting gross profit and net income calculation. The image displays a spreadsheet with financial data related to inventory and cost of goods sold (COGS). The spreadsheet appears to be set up for calculating average cost and includes the following elements:### Spreadsheet Layout:1. **Tabs:** - Sheet1 - Sheet2 - Sheet32. **Cost of Goods Sold (COGS) Section:** - **Columns:** - Date - Item - Quantity - Cost Per Unit - Total3. **LIFO Section:** - This section involves the Last-In, First-Out (LIFO) inventory valuation method, which affects how inventory costs are calculated.4. **Average Cost Section:** - **Highlighted Labels:** - "Average Cost Per Unit": Yellow - "Income Statement": Yellow - "Costs For E. Expenses (Operating Expenses)": Green - "Sales": Yellow - "Gross Profit" and "Net Income": Green5. **Financial Figures:** - "Net Income": $1,400.00 - "Gross Profit": Highlighted in Green - "Operating Expenses": Highlighted in Green 6. **Graphical Elements:** - There are color-coded sections for readability, with yellow and green highlights marking important financial headings.The spreadsheet is likely used to calculate inventory costs and assess profitability for a business using the average cost method. It involves financial statement components like Sales, COGS, Gross Profit, and Operating Expenses to compute Net Income.

FIFO is the abbreviation used for the First In First Out method: FIFO Date Item Quantity Cost per unit ($) Total ($) Sales Sale price Total Sales($) 01-May Beginning Inventory 30 17 510 30 at $37.00 each 1,110 08-May Purchase 28 18 504 28 at $37.00 each 1,036 15-May Purchase 42 19 798 42 at $37.00 each 1,554 22-May Purchase 10 22 220 10 at $37.00 each 370 29-May Purchase 50 26 1,300 25 at $37.00 each 925 135 4,995 Ending Inventory is $650 (25 units * $26) Particulars Amount ($) Opening Inventory 510 Purchases 2,822 Less: Ending Inventory -650 Cost of Goods Sold 2,682 Income Statement Sales 4,995 Cost of Goods Sold 2,682 Gross profit 2,313 Operating Expense 1,400 Net Income 913LIFO is the abbreviation used for the Last In First Out method: LIFO Date Item Quantity Cost per unit ($) Total ($) Sales Sale price Total ($) 01-May Beginning Inventory 30 17 510 5 at $37.00 each 185 08-May Purchase 28 18 504 28 at $37.00 each 1,036 15-May Purchase 42 19 798 42 at $37.00 each 1,554 22-May Purchase 10 22 220 10 at $37.00 each 370 29-May Purchase 50 26 1,300 50 at $37.00 each 1,850 135 4,995 Ending Inventory is $675 (25 units * $27) Particulars Amount ($) Opening Inventory 510 Purchases 2,822 Less: Ending Inventory -675 Cost of Goods Sold 2,657 Income Statement Sales 4,995 Cost of Goods Sold 2,657 Gross profit 2,338 Operating Expense 1,400 Net Income 938

Answered: Gross Profit %===>

Business

Accounting

Gross Profit %===>

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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