Inventory: It refers to the total stock of such goods or items which are held by the business organizations with the purpose of sale. Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization. The various inventory cost flow methods are: First-in, first-out (FIFO) Last in, first-out (LIFO) Average-cost FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization. LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period. To identify: The relevant method which provides highest net income when prices are on a rise

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Answer 1

Question

Chapter 6, Problem 5BE

(a)

To determine

Inventory: It refers to the total stock of such goods or items which are held by the business organizations with the purpose of sale.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To identify: The relevant method which provides highest net income when prices are on a rise

(b)

To determine

To identify: The relevant method which provides highest ending inventory when prices are on a rise

(c)

To determine

To identify: The relevant method which provides lowest income tax, when prices are on a rise

(d)

To determine

To identify: The relevant method which provides most stable earnings, when prices are on a rise

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In 2014, LL Bean sold 450,000 pairs of boots. At one point in 2014, it had a back order of 100,000. In 2015, LL Bean expects to sell 500,000 pairs of boots. As of late November 2015, it has a back order of 50,000.Question: When would LL Bean see sales revenue from the sale of its back order on the boots?

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Answer 2

Question

Chapter 6, Problem 5BE

(a)

To determine

Inventory: It refers to the total stock of such goods or items which are held by the business organizations with the purpose of sale.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To identify: The relevant method which provides highest net income when prices are on a rise

(b)

To determine

To identify: The relevant method which provides highest ending inventory when prices are on a rise

(c)

To determine

To identify: The relevant method which provides lowest income tax, when prices are on a rise

(d)

To determine

To identify: The relevant method which provides most stable earnings, when prices are on a rise

Expert Solution & Answer

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Answer 3

Question

Chapter 6, Problem 5BE

(a)

To determine

Inventory: It refers to the total stock of such goods or items which are held by the business organizations with the purpose of sale.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To identify: The relevant method which provides highest net income when prices are on a rise

(b)

To determine

To identify: The relevant method which provides highest ending inventory when prices are on a rise

(c)

To determine

To identify: The relevant method which provides lowest income tax, when prices are on a rise

(d)

To determine

To identify: The relevant method which provides most stable earnings, when prices are on a rise

Expert Solution & Answer

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Answer 4

Question

Chapter 6, Problem 5BE

(a)

To determine

Inventory: It refers to the total stock of such goods or items which are held by the business organizations with the purpose of sale.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To identify: The relevant method which provides highest net income when prices are on a rise

(b)

To determine

To identify: The relevant method which provides highest ending inventory when prices are on a rise

(c)

To determine

To identify: The relevant method which provides lowest income tax, when prices are on a rise

(d)

To determine

To identify: The relevant method which provides most stable earnings, when prices are on a rise

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 5BE

(a)

To determine

Inventory: It refers to the total stock of such goods or items which are held by the business organizations with the purpose of sale.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To identify: The relevant method which provides highest net income when prices are on a rise

(b)

To determine

To identify: The relevant method which provides highest ending inventory when prices are on a rise

(c)

To determine

To identify: The relevant method which provides lowest income tax, when prices are on a rise

(d)

To determine

To identify: The relevant method which provides most stable earnings, when prices are on a rise

Answer 6

Chapter 6, Problem 5BE

(a)

To determine

Inventory: It refers to the total stock of such goods or items which are held by the business organizations with the purpose of sale.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To identify: The relevant method which provides highest net income when prices are on a rise

Answer 7

Chapter 6, Problem 5BE

(a)

To determine

Inventory: It refers to the total stock of such goods or items which are held by the business organizations with the purpose of sale.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To identify: The relevant method which provides highest net income when prices are on a rise

Answer 8

(b)

To determine

To identify: The relevant method which provides highest ending inventory when prices are on a rise

Answer 9

(b)

To determine

To identify: The relevant method which provides highest ending inventory when prices are on a rise

Answer 10

(c)

To determine

To identify: The relevant method which provides lowest income tax, when prices are on a rise

Answer 11

(c)

To determine

To identify: The relevant method which provides lowest income tax, when prices are on a rise

Answer 12

(d)

To determine

To identify: The relevant method which provides most stable earnings, when prices are on a rise

Answer 13

(d)

To determine

To identify: The relevant method which provides most stable earnings, when prices are on a rise

Answer 14

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Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 6 - Prob. 1Q Ch. 6 - Prob. 2Q Ch. 6 - Prob. 3Q Ch. 6 - Prob. 4Q Ch. 6 - Prob. 5Q Ch. 6 - 6. Explain the difference between the terms FOB...Ch. 6 - Prob. 7Q Ch. 6 - Prob. 8Q Ch. 6 - 9. “The selection of an inventory cost flow method...Ch. 6 - Prob. 10Q

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To identify: The relevant method which provides highest ending inventory when prices are on a rise

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To identify: The relevant method which provides most stable earnings, when prices are on a rise

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