Grother Company uses the periodic inventory method and had the following inventory information available: Units Unit Cost Total Cost 1/1 Beginning Inventory 100 $4 $ 400 1/20 Purchase 500 $52,500 7/25 Purchase 100 $7 700 10/20 Purchase 300 $8 2,400 1,000 $6,000A physical count of inventory on December 31 revealed that there were 350 units on hand. Instructions Answer the following independent questions and show computations supporting your answers. 1. Assume that the company uses the FIFO method. The value of the ending inventory at December 31 is $ 2. Assume that the company uses the average cost method. The value of the ending inventory on December 31 is $ 3. Assume that the company uses the LIFO method. The value of the ending inventory on December 31 is $ 4. Determine the difference in the amount of income that the company would have reported if it had used the FIFO method instead of the LIFO method. Would income have been greater or less?.
Grother Company uses the periodic inventory method and had the following inventory information available: Units Unit Cost Total Cost 1/1 Beginning Inventory 100 $4 $ 400 1/20 Purchase 500 $52,500 7/25 Purchase 100 $7 700 10/20 Purchase 300 $8 2,400 1,000 $6,000A physical count of inventory on December 31 revealed that there were 350 units on hand. Instructions Answer the following independent questions and show computations supporting your answers. 1. Assume that the company uses the FIFO method. The value of the ending inventory at December 31 is $ 2. Assume that the company uses the average cost method. The value of the ending inventory on December 31 is $ 3. Assume that the company uses the LIFO method. The value of the ending inventory on December 31 is $ 4. Determine the difference in the amount of income that the company would have reported if it had used the FIFO method instead of the LIFO method. Would income have been greater or less?.
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter7: Inventories
Section: Chapter Questions
Problem 5PA: Dymac Appliances uses the periodic inventory system. Details regarding the inventory of appliances...
Related questions
Question
![Grother Company uses the periodic inventory method and had the
following inventory information available: Units Unit Cost Total Cost 1/1
Beginning Inventory 100 $4 $ 400 1/20 Purchase 500 $52,500 7/25
Purchase 100 $7 700 10/20 Purchase 300 $8 2,400 1,000 $6,000A
physical count of inventory on December 31 revealed that there were 350
units on hand. Instructions Answer the following independent questions and
show computations supporting your answers.
1. Assume that the company uses the FIFO method. The value of the
ending inventory at December 31 is $
2. Assume that the company uses the average cost method. The value of
the ending inventory on December 31 is $
3. Assume that the company uses the LIFO method. The value of the
ending inventory on December 31 is $
4. Determine the difference in the amount of income that the company
would have reported if it had used the FIFO method instead of the LIFO
method. Would income have been greater or less?.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe5a89238-1b86-4efc-9172-1aa3d646cd17%2Fa7ed8d1c-b7b9-4f07-a11a-47dcefbb51d1%2F0fynl0p_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Grother Company uses the periodic inventory method and had the
following inventory information available: Units Unit Cost Total Cost 1/1
Beginning Inventory 100 $4 $ 400 1/20 Purchase 500 $52,500 7/25
Purchase 100 $7 700 10/20 Purchase 300 $8 2,400 1,000 $6,000A
physical count of inventory on December 31 revealed that there were 350
units on hand. Instructions Answer the following independent questions and
show computations supporting your answers.
1. Assume that the company uses the FIFO method. The value of the
ending inventory at December 31 is $
2. Assume that the company uses the average cost method. The value of
the ending inventory on December 31 is $
3. Assume that the company uses the LIFO method. The value of the
ending inventory on December 31 is $
4. Determine the difference in the amount of income that the company
would have reported if it had used the FIFO method instead of the LIFO
method. Would income have been greater or less?.
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