Mozart Company uses a perpetual inventory system for its one product. Its beginning inventory and purchases during year 2002 follow: Date Units Unit Cost January 1 Inventory 400 $14 March 10 Purchase 200 15 May 9 Purchase 300 16 Sept. 22 Purchase 250 20 Nov. 28 Purchase 100 21 At December 31, 2002, 550 units are in inventory. Sales in year 2002 are as follows: January 15 200 units at $30 April 1 200 units at $30 November 1 300 units at $35 Additional unit cost tracking data for use in applying specific identification: (1) January 15 sale - 200 units @ $14, (2) April 1 sale - 200 units @15, and (3) November 1 sale - 200 units @ $14 and 100 units @ $ 20. Management wants a report that shows how changing from FIFO to another method would change net income. Prepare a schedule showing (1) the cost of goods sold amount under each of the four methods, (2) the amount by which each cost of goods sold total is different from the FIFO cost of goods sold, and (3) the effect on net income if another method is used instead of FIFO. Could you please each step in details?
Mozart Company uses a perpetual inventory system for its one product. Its beginning inventory and purchases during year 2002 follow:
Date Units Unit Cost
January 1 Inventory 400 $14
March 10 Purchase 200 15
May 9 Purchase 300 16
Sept. 22 Purchase 250 20
Nov. 28 Purchase 100 21
At December 31, 2002, 550 units are in inventory. Sales in year 2002 are as follows:
January 15 200 units at $30
April 1 200 units at $30
November 1 300 units at $35
Additional unit cost tracking data for use in applying specific identification:
(1) January 15 sale - 200 units @ $14, (2) April 1 sale - 200 units @15, and (3) November
1 sale - 200 units @ $14 and 100 units @ $ 20.
Management wants a report that shows how changing from FIFO to another method
would change net income. Prepare a schedule showing (1) the cost of goods sold amount
under each of the four methods, (2) the amount by which each cost of goods sold total is
different from the FIFO cost of goods sold, and (3) the effect on net income if another
method is used instead of FIFO.
Could you please each step in details?
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