Required:15. If the FIFO cost flow method is used, the sale return shall be costed back into inventory at what unit cost?16. If the average cost flow method is used, the sale return shall be costed back into inventory at what unit cost? PROBLEM 12: DDD Company uses the perpetual inventory system. The inventory transactions forAugust of the current year were as follows:NumberUnitCostDate8/1Transactionof UnitsBeginning balance20,000P 4.008/78/108/128/16Purchase10,00020,0004.20Purchase4.30Sale15,00020,000Purchase4.608/208/28Sale40,0003,000Sale returnThe sale return on August 28 relates to the sale made on August 20.15. If the FIFO cost flow method is used, the sale return shall be costed back into inventory atwhat unit cost?16. If the average cost flow method is used, the sale return shall be costed back intoinventory at what unit cost?

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Description: Required:15. If the FIFO cost flow method is used, the sale return shall be costed back into inventory at what unit cost?16. If the average cost flow method is used, the sale return shall be costed back into inventory at what unit cost? PROBLEM 12: D

15) Explanation - Sales return are shown as negative figure because they lead to a decrease in…

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PROBLEM 12: DDD Company uses the perpetual inventory system. The inventory transactions for August of the current year were as follows: Number of Units 20,000 Unit Date Transaction Cost P 4.00 8/1 8/7 8/10 8/12 8/16 8/20 8/28 Beginning balance Purchase 10,000 20,000 4.20 Purchase 4.30 15,000 20,000 Sale Purchase 4.60 Sale 40,000 3,000 Sale return The sale return on August 28 relates to the sale made on August 20. 15. If the FIFO cost flow method is used, the sale return shall be costed back into inventory at what unit cost? 16. If the average cost flow method is used, the sale return shall be costed back into inventory at what unit cost?

PROBLEM 12: DDD Company uses the perpetual inventory system. The inventory transactions for August of the current year were as follows: Number of Units 20,000 Unit Date Transaction Cost P 4.00 8/1 8/7 8/10 8/12 8/16 8/20 8/28 Beginning balance Purchase 10,000 20,000 4.20 Purchase 4.30 15,000 20,000 Sale Purchase 4.60 Sale 40,000 3,000 Sale return The sale return on August 28 relates to the sale made on August 20. 15. If the FIFO cost flow method is used, the sale return shall be costed back into inventory at what unit cost? 16. If the average cost flow method is used, the sale return shall be costed back into inventory at what unit cost?

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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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Question

Required:

15. If the FIFO cost flow method is used, the sale return shall be costed back into inventory at what unit cost?
16. If the average cost flow method is used, the sale return shall be costed back into inventory at what unit cost?

PROBLEM 12: DDD Company uses the perpetual inventory system. The inventory transactions for
August of the current year were as follows:
Number
Unit
Cost
Date
8/1
Transaction
of Units
Beginning balance
20,000
P 4.00
8/7
8/10
8/12
8/16
Purchase
10,000
20,000
4.20
Purchase
4.30
Sale
15,000
20,000
Purchase
4.60
8/20
8/28
Sale
40,000
3,000
Sale return
The sale return on August 28 relates to the sale made on August 20.
15. If the FIFO cost flow method is used, the sale return shall be costed back into inventory at
what unit cost?
16. If the average cost flow method is used, the sale return shall be costed back into
inventory at what unit cost?

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The original cost of an item of inventory is above its replacement cost. The item s replacement cost is below its net realizable value but is higher than its net realizable value minus a normal profit. Under the lower of cost or market method, the inventory item should be valued at: a. Net realizable value. b. Original cost. c. Replacement cost. d. Net realizable value less normal profit margin.
Which method would produce the same unit cost for Inventory and Cost of Good Sold in periods of rising prices? Select one: a. Weighted Average b. FIFO c. LIFO
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