Weighted Average Method of Inventory Valuation : Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate. FIFO Method of Inventory Valuation: Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly. To prepare: The income statements under FIFO and weighted average methods.

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Answer 1

Question

Chapter 21, Problem 21.4E

a.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: The income statements under FIFO and weighted average methods.

b.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: Income statement as per the weighted average method.

c.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: The retained earnings column for the year 2021.

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Answer 2

Question

Chapter 21, Problem 21.4E

a.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: The income statements under FIFO and weighted average methods.

b.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: Income statement as per the weighted average method.

c.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: The retained earnings column for the year 2021.

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Answer 3

Question

Chapter 21, Problem 21.4E

a.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: The income statements under FIFO and weighted average methods.

b.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: Income statement as per the weighted average method.

c.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: The retained earnings column for the year 2021.

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Answer 4

Question

Chapter 21, Problem 21.4E

a.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: The income statements under FIFO and weighted average methods.

b.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: Income statement as per the weighted average method.

c.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: The retained earnings column for the year 2021.

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Answer 5

Chapter 21, Problem 21.4E

a.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: The income statements under FIFO and weighted average methods.

b.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: Income statement as per the weighted average method.

c.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: The retained earnings column for the year 2021.

Answer 6

Chapter 21, Problem 21.4E

a.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: The income statements under FIFO and weighted average methods.

Answer 7

Chapter 21, Problem 21.4E

a.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: The income statements under FIFO and weighted average methods.

Answer 8

b.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: Income statement as per the weighted average method.

Answer 9

b.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: Income statement as per the weighted average method.

Answer 10

c.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: The retained earnings column for the year 2021.

Answer 11

c.

To determine

Weighted Average Method of Inventory Valuation:

Under the weighted average method of inventory valuation, inventory is valued based on the weighted average cost of purchase of the inventory in this method purchase prices are given weights, according to the quantity of inventory purchased at that rate.

FIFO Method of Inventory Valuation:

Under the FIFO method, the inventory is assumed to be allocated to production and sale on a first come first out basis, the inventory that has been purchased first is used first in the production and sale and the closing inventory is computed accordingly.

To prepare: The retained earnings column for the year 2021.

Answer 12

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Answer 13

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Answer 15

Ch. 21 - Are accounting changes permitted in financial...Ch. 21 - How do firms report accounting changes under the...Ch. 21 - Prob. 21.3Q Ch. 21 - How do firms account for changes in accounting...Ch. 21 - Prob. 21.5Q Ch. 21 - Prob. 21.6Q Ch. 21 - Prob. 21.7Q Ch. 21 - Prob. 21.8Q Ch. 21 - Do accounting errors that self-correct within two...Ch. 21 - Does a firm need to correct an error that...

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