**Simple Plan Enterprises: Inventory System Analysis**Simple Plan Enterprises uses a periodic inventory system. Its records showed the following:**Inventory Details as of December 31:**- Using FIFO (First-In, First-Out) → 56 Units @ $23 = $1,288- Using LIFO (Last-In, First-Out) → 56 Units @ $19 = $1,064**Transactions in the Following Year:**| Date | Units | Unit Cost | Total Cost ||--------------|-------|-----------|-------------|| Purchase, January 9 | 68 | 24 | $1,632 || Purchase, January 20 | 118 | 25 | $2,950 || Sale, January 11 (at $47 per unit) | 98 | - | - || Sale, January 27 (at $48 per unit) | 74 | - | - |**Required Tasks:**1. Compute the number and cost of goods available for sale, the cost of ending inventory, and the cost of goods sold under FIFO and LIFO.2. Compute the inventory turnover ratio under the FIFO and LIFO inventory costing methods.3. Analyze whether the inventory method used makes a significant difference in the inventory turnover ratio.**Interactive Section:**Complete this question by entering your answers in the tabs below.**Calculation Table:**| | FIFO | LIFO ||---------------------|------|------|| Number of Goods Available for Sale (Units) | | || Cost of Goods Available for Sale | | || Cost of Ending Inventory | | || Cost of Goods Sold | | |To complete the exercise, fill in the blanks using the provided data and your computations. This analysis will enhance your understanding of inventory management and its impact on financial metrics.

The question is based on the concept of Cost Accounting.

Answered: Simple Plan Enterprises uses a periodic…

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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Vaughn Company uses a periodic inventory system. For April, when the company sold 540 units, the following information is available. April 1 inventory April 15 purchase April 23 purchase Ending inventory Units Cost of goods sold 220 380 400 1,000 Unit Cost $25 $ 30 33 Total Cost $5,500 Compute the April 30 inventory and the April cost of goods sold using the FIFO method. 11,400 13,200 $30,100
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A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 280 units. Ending inventory at January 31 totals 130 units. Beginning inventory on January 1 Purchase on January 9 Purchase on January 25 Perpetual FIFO: Required: Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the FIFO method. Date January 1 January 9 January 25 January 26 Totals Goods purchased # of units Cost per unit Units Unit Cost 250 60 100 # of units sold $2.30 2.50 2.64 Cost of Goods Sold Cost per Cost of Goods unit Sold Inventory Balance Cost per unit # of units Inventory Balance
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