LO 7-3 connect PB7-1 Analyzing the Effects of Four Alternative Inventory Methods in a Periodic Inventory System Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January 31. The inventory's selling price is is $9 per unit. sw Br Inuoma dose no 2. Transactions Inventory, January 1 Sale, January 10 Purchase, January 12 Sale, January 17 Purchase, January 26 Tros un diw Unit Cost $2.50 nolasim adi ancillim.ni) atnomsts12 Isionsnit at 3.00 2017 4.00 028 Units 250 2001 (200) 300 anuomas galwolle (150) 80 blo2 abood to 2200 Total Cost $625 Se od tehons 900 320 Required: 1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at January 31 under each of the following inventory costing methods: a. Weighted average cost. (Round the weighted-average unit cost to two decimal places.) b. First-in, first-out. bus 0001 10vor c. Last-in, first-out.nl) d. Specific identification, assuming that the January 10 sale was from the beginning inven tory and the January 17 sale was from the January 12 purchase. Of the four methods, which will result in the highest gross profit? Which will result in the lowest income taxes?
LO 7-3 connect PB7-1 Analyzing the Effects of Four Alternative Inventory Methods in a Periodic Inventory System Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January 31. The inventory's selling price is is $9 per unit. sw Br Inuoma dose no 2. Transactions Inventory, January 1 Sale, January 10 Purchase, January 12 Sale, January 17 Purchase, January 26 Tros un diw Unit Cost $2.50 nolasim adi ancillim.ni) atnomsts12 Isionsnit at 3.00 2017 4.00 028 Units 250 2001 (200) 300 anuomas galwolle (150) 80 blo2 abood to 2200 Total Cost $625 Se od tehons 900 320 Required: 1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at January 31 under each of the following inventory costing methods: a. Weighted average cost. (Round the weighted-average unit cost to two decimal places.) b. First-in, first-out. bus 0001 10vor c. Last-in, first-out.nl) d. Specific identification, assuming that the January 10 sale was from the beginning inven tory and the January 17 sale was from the January 12 purchase. Of the four methods, which will result in the highest gross profit? Which will result in the lowest income taxes?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:LO 7-3
anogro0 820)
GROUP B PROBLEMS
connect
PB7-1 Analyzing the Effects of Four Alternative Inventory Methods in a Periodic Inventory System
Mojo Industries tracks the number of units purchased and sold throughout each accounting
period but applies its inventory costing method at the end of each period, as if it uses a periodic
inventory system. Assume its accounting records provided the following information at the end of
the accounting period, January 31. The inventory's selling price is $9 per unit.
BW Jarl
2.
Transactions
Inventory, January 1
Sale, January 10
Purchase, January 12
Sale, January 17
Purchase, January 26
000552
TROS
Units
250
$625
(enoillim ni) einemsisiz Isionsni) est (200) os galwollet sil tahogs
3.00
300
900
Unit Cost
$2.50
um dliw smod visvo gnun to noissim adi babauot
4.00
020.
(150)
80
blo2 abood to 1200
votneval prionice
Total Cost
320
Required:
1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at
January 31 under each of the following inventory costing methods:
a. Weighted average cost. (Round the weighted-average unit cost to two decimal places.)
b. First-in, first-out.
bus on toonut oinovni ad seits
c. Last-in, first-out.
d. Specific identification, assuming that the January 10 sale was from the beginning inven
tory and the January 17 sale was from the January 12 purchase.
00 309018
Of the four methods, which will result in the highest gross profit? Which will result in the
lowest income taxes?
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