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You have the following information for Blossom Company Blossoms uses the periodic method of accounting for its inventory transactions Blossom only carries one brand and size of diamonds-all are identical Each hatch of diamonds purchased is carefully coded and marked with its purchase cost March 1 March 3 March 5 March 10 March 25 Beginning inventory 140 diamonds at a cost of $300 per diamond Purchased 190 diamonds at a cost of $340 each Sold 170 diamonds for $600 each Purchased 320 diamonds at a cost of $365 each Sold 300 diamonds for $650 each

You have the following information for Blossom Company Blossoms uses the periodic method of accounting for its inventory transactions Blossom only carries one brand and size of diamonds-all are identical Each hatch of diamonds purchased is carefully coded and marked with its purchase cost March 1 March 3 March 5 March 10 March 25 Beginning inventory 140 diamonds at a cost of $300 per diamond Purchased 190 diamonds at a cost of $340 each Sold 170 diamonds for $600 each Purchased 320 diamonds at a cost of $365 each Sold 300 diamonds for $650 each

FINANCIAL ACCOUNTING
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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Current Attempt in Progress You have the following information for Blossom Company Blossom uses the periodic method of accounting for its inventory transactions, Blossom only carries one brand and size of diamonds-all are identical Each hatch of diamonds purchased is carefully coded and marked with its purchase cost March 1 March 3 March 5 March 10 March 25 ✓ Your answer is correct Beginning inventory 140 diamonds at a cost of $300 perdiamond Purchased 190 diamonds at a cost of $340 each Sold 170 diamonds for $600 each. Purchased 320 diamonds at a cost of $365 each Sold 300 damonds for $650 each. Assume that Blossom uses the specific identification cost flow method. Demonstrate how Blossom could maximize its gross profit for the month by specifically selecting which diamonds to sell on March 5 and March 25 (1) (2) To maximize gross profit, Blossom should sell the diamonds with the lowest cost Demonstrate how Blossom could minimize its gross profit for the month by selecting which diamonds to sell on March 5 and March 25 To minimize gross profit, Blosson should sell the diamonds with the eTextbook and Media List of Accounts highest cost
Transcribed Image Text:Current Attempt in Progress You have the following information for Blossom Company Blossom uses the periodic method of accounting for its inventory transactions, Blossom only carries one brand and size of diamonds-all are identical Each hatch of diamonds purchased is carefully coded and marked with its purchase cost March 1 March 3 March 5 March 10 March 25 ✓ Your answer is correct Beginning inventory 140 diamonds at a cost of $300 perdiamond Purchased 190 diamonds at a cost of $340 each Sold 170 diamonds for $600 each. Purchased 320 diamonds at a cost of $365 each Sold 300 damonds for $650 each. Assume that Blossom uses the specific identification cost flow method. Demonstrate how Blossom could maximize its gross profit for the month by specifically selecting which diamonds to sell on March 5 and March 25 (1) (2) To maximize gross profit, Blossom should sell the diamonds with the lowest cost Demonstrate how Blossom could minimize its gross profit for the month by selecting which diamonds to sell on March 5 and March 25 To minimize gross profit, Blosson should sell the diamonds with the eTextbook and Media List of Accounts highest cost
Assume that Blossom uses the FIFO cost flow assumption. Calculate cost of goods sold. How much gross profit would the company report under this cost flow assumption? Cost of goods sold Gross profit eTextbook and Media List of Accounts Your answer is incorrect Assume that Blossom uses the LIFO cost flow assumption. Calculate cost of goods sold. How much gross profit would the company report under this cost flow assumption? Cost of goods sold Gross profit $ eTextbook and Media List of Accounts
Transcribed Image Text:Assume that Blossom uses the FIFO cost flow assumption. Calculate cost of goods sold. How much gross profit would the company report under this cost flow assumption? Cost of goods sold Gross profit eTextbook and Media List of Accounts Your answer is incorrect Assume that Blossom uses the LIFO cost flow assumption. Calculate cost of goods sold. How much gross profit would the company report under this cost flow assumption? Cost of goods sold Gross profit $ eTextbook and Media List of Accounts
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