states significant items must conform to GAAP 6-17 Comparing inventory methods Express Lane, a regional convenience store chain, maintains milk inventory by the gal- lon. The first month's milk purchases and sales at its Freeport, Florida, location follow: Learning Objective 2 1. Ending Merch. Inv. $10.60 Nov. 2 Purchased 8 gallons @ $2.00 each Purchased 2 gallons @ $2.10 each 6. Sold 3 gallons of milk to a customer 13 Purchased 2 gallons @ $2.20 each 14 Sold 4 gallons of milk to a customer Requirements 1. Determine the amount that would be reported in ending merchandise inventory on November 15 using the FIFO inventory costing method. 2. Determine the amount that would be reported in ending merchandise inventory on November 15 using the LIFO inventory costing method. 3. Determine the amount that would be reported in ending merchandise inventory on November 15 using the weighted-average inventory costing method. Round all amounts to the nearest cent.

states significant items must conform to GAAP 6-17 Comparing inventory methods Express Lane, a regional convenience store chain, maintains milk inventory by the gal- lon. The first month's milk purchases and sales at its Freeport, Florida, location follow: Learning Objective 2 1. Ending Merch. Inv. $10.60 Nov. 2 Purchased 8 gallons @ $2.00 each Purchased 2 gallons @ $2.10 each 6. Sold 3 gallons of milk to a customer 13 Purchased 2 gallons @ $2.20 each 14 Sold 4 gallons of milk to a customer Requirements 1. Determine the amount that would be reported in ending merchandise inventory on November 15 using the FIFO inventory costing method. 2. Determine the amount that would be reported in ending merchandise inventory on November 15 using the LIFO inventory costing method. 3. Determine the amount that would be reported in ending merchandise inventory on November 15 using the weighted-average inventory costing method. Round all amounts to the nearest cent.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter5: Inventories And Cost Of Goods Sold

Section: Chapter Questions

Problem 5.3P

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Question

Hases as the first
ut (LIFO)
4. Conservatism
5. Consistency Principle
5. Weighted-Average
7. Disclosure Principle
b. Requires that a company report enough information
for outsiders to make knowledgeable decisions.
c. Identifies exactly which inventory item was sold
Usually used for higher cost inventory.
d. Calculates a weighted average cost based on the cost
of goods available for sale and the number of units
available.
3. First-In, First-Out (FIFO)
e. Principle whose foundation is to exercise caution in
reporting financial statement items.
f. Treats the most recent/newest purchases as the first
units sold.
g. Businesses should use the same accounting methods
from period to period.
h. Principle that states significant items must conform
to GAAP.
Learning Objective 2
6-17 Comparing inventory methods
Express Lane, a regional convenience store chain, maintains milk inventory by the gal-
lon. The first month's milk purchases and sales at its Freeport, Florida, location follow:
1. Ending Merch. Inv. $10.60
Nov. 2
Purchased 8 gallons @ $2.00 each
6.
Purchased 2 gallons @ $2.10 each
8
Sold 3 gallons of milk to a customer
13
Purchased 2 gallons @ $2.20 each
14
Sold 4 gallons of milk to a customer
Requirements
1. Determine the amount that would be reported in ending merchandise
inventory on November 15 using the FIFO inventory costing method.
2. Determine the amount that would be reported in ending merchandise
inventory on November 15 using the LIFO inventory costing method.
3. Determine the amount that would be reported in ending merchandise
inventory on November 15 using the weighted-average inventory costing
method. Round all amounts to the nearest cent.

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