Question# 3Xiomi Co. is a retailer dealing in a single product. Beginning inventory at January 1 of this year iszero, operating expenses for this same year are $5,000, and there are 2,000 common sharesoutstanding. The following purchases are made this year:UnitsPer UnitCost$ 1,0003,3007,2004,2007,50023,200JanuaryMarch100$ 1030011June60012October30014December50015Total1800Ending inventory at December 31 is 800 units. End-of-year assets, excluding inventories, amountto $75,000, of which $50,000 of the $75,000 are current. Current liabilities amount to $25,000, andlong-term liabilities equal $10,000.Required:a) Determine net income for this year under cach of the following inventory methods. Assume asales price of $25 per unit and ignore income taxes.i) FIFOii) LIFOiii) Average costb) Compute the following ratios under each of the inventory methods of FIFO, LIFO, and averagecost.i) Current ratioii) Debt-to-equity ratioiii) Inventory turnoveriv) Return on total assetsv) Gross margin as a percent of salesvi) Net profit as a percent of salesc) Discuss the effects of inventory accounting methods for financial statement analysis given theresults from parts (a) and (b).

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Description: Question# 3Xiomi Co. is a retailer dealing in a single product. Beginning inventory at January 1 of this year iszero, operating expenses for this same year are $5,000, and there are 2,000 common sharesoutstanding. The following purchases are made th

(A) 1. Under The FIFO method of inventory valuation the item of inventory which is purchased first…

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Question# Xiomi Co. is a retailer dealing in a single product. Beginning inventory at January 1 of this year is zero, operating expenses for this same year are $5,000, and there are 2,000 common shares outstanding. The following purchases are made this year: ITI Cost $ 1,000 3,300 7,200 Units Per Unit $ 10 January March 100 300 11 June 600 12 October December Total 300 14 4,200 7,500 23,200 500 15 1800 Ending inventory at December 31 is 800 units. End-of-year assets, excluding inventories, amount to $75,000, of which $50,000 of the $75,000 are current. Current liabilities amount to $25,000, and long-term liabilities equal $10,000.

Question# Xiomi Co. is a retailer dealing in a single product. Beginning inventory at January 1 of this year is zero, operating expenses for this same year are $5,000, and there are 2,000 common shares outstanding. The following purchases are made this year: ITI Cost $ 1,000 3,300 7,200 Units Per Unit $ 10 January March 100 300 11 June 600 12 October December Total 300 14 4,200 7,500 23,200 500 15 1800 Ending inventory at December 31 is 800 units. End-of-year assets, excluding inventories, amount to $75,000, of which $50,000 of the $75,000 are current. Current liabilities amount to $25,000, and long-term liabilities equal $10,000.

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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