Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time. In First-in-First-Out method, the cost of initial purchased items are sold first. The value of the ending inventory consists the recent purchased items. In Last-in-First-Out method, the cost of last purchased items are sold first. The value of the closing stock consists the initial purchased items. In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation: Weighted-average Cost = Total Cost of Goods Available For Sale Total Number of Units Available For Sale The cost of goods sold, ending merchandise inventory and gross profit under FIFO method using perpetual inventory system.

Question

Want to see the full answer?

Answer 1

Question

Chapter 6, Problem 6.33BP

1.

To determine

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

In First-in-First-Out method, the cost of initial purchased items are sold first. The value of the ending inventory consists the recent purchased items.

In Last-in-First-Out method, the cost of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation:

Weighted-average Cost=Total Cost of Goods Available For SaleTotal Number of Units Available For Sale

The cost of goods sold, ending merchandise inventory and gross profit under FIFO method using perpetual inventory system.

2.

To determine

The cost of goods sold, ending merchandise inventory and gross profit under LIFO method using perpetual inventory system.

3.

To determine

The cost of goods sold, ending merchandise inventory and gross profit under weighted average method using perpetual inventory system.

4.

To determine

To Explain: The method that the company should use to pay least amount of income taxes.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

On January 1, 2020, Superior Manufacturing Company purchased a machine for $50,000,000. Superior's management expects to use the machine for 35,000 hours over the next five years. The estimated residual value of the machine at the end of the fifth year is $60,000. The machine was used for 5,000 hours in 2020 and 6,200 hours in 2021. What is the depreciation expense for 2020 if the company uses the units of the production method of depreciation?

Financial accounting

Solve this Accounting problem

Answer 2

Question

Chapter 6, Problem 6.33BP

1.

To determine

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

In First-in-First-Out method, the cost of initial purchased items are sold first. The value of the ending inventory consists the recent purchased items.

In Last-in-First-Out method, the cost of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation:

Weighted-average Cost=Total Cost of Goods Available For SaleTotal Number of Units Available For Sale

The cost of goods sold, ending merchandise inventory and gross profit under FIFO method using perpetual inventory system.

2.

To determine

The cost of goods sold, ending merchandise inventory and gross profit under LIFO method using perpetual inventory system.

3.

To determine

The cost of goods sold, ending merchandise inventory and gross profit under weighted average method using perpetual inventory system.

4.

To determine

To Explain: The method that the company should use to pay least amount of income taxes.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 6, Problem 6.33BP

1.

To determine

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

In First-in-First-Out method, the cost of initial purchased items are sold first. The value of the ending inventory consists the recent purchased items.

In Last-in-First-Out method, the cost of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation:

Weighted-average Cost=Total Cost of Goods Available For SaleTotal Number of Units Available For Sale

The cost of goods sold, ending merchandise inventory and gross profit under FIFO method using perpetual inventory system.

2.

To determine

The cost of goods sold, ending merchandise inventory and gross profit under LIFO method using perpetual inventory system.

3.

To determine

The cost of goods sold, ending merchandise inventory and gross profit under weighted average method using perpetual inventory system.

4.

To determine

To Explain: The method that the company should use to pay least amount of income taxes.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 6, Problem 6.33BP

1.

To determine

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

In First-in-First-Out method, the cost of initial purchased items are sold first. The value of the ending inventory consists the recent purchased items.

In Last-in-First-Out method, the cost of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation:

Weighted-average Cost=Total Cost of Goods Available For SaleTotal Number of Units Available For Sale

The cost of goods sold, ending merchandise inventory and gross profit under FIFO method using perpetual inventory system.

2.

To determine

The cost of goods sold, ending merchandise inventory and gross profit under LIFO method using perpetual inventory system.

3.

To determine

The cost of goods sold, ending merchandise inventory and gross profit under weighted average method using perpetual inventory system.

4.

To determine

To Explain: The method that the company should use to pay least amount of income taxes.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 6, Problem 6.33BP

1.

To determine

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

In First-in-First-Out method, the cost of initial purchased items are sold first. The value of the ending inventory consists the recent purchased items.

In Last-in-First-Out method, the cost of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation:

Weighted-average Cost=Total Cost of Goods Available For SaleTotal Number of Units Available For Sale

The cost of goods sold, ending merchandise inventory and gross profit under FIFO method using perpetual inventory system.

2.

To determine

The cost of goods sold, ending merchandise inventory and gross profit under LIFO method using perpetual inventory system.

3.

To determine

The cost of goods sold, ending merchandise inventory and gross profit under weighted average method using perpetual inventory system.

4.

To determine

To Explain: The method that the company should use to pay least amount of income taxes.

Answer 6

Chapter 6, Problem 6.33BP

1.

To determine

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

In First-in-First-Out method, the cost of initial purchased items are sold first. The value of the ending inventory consists the recent purchased items.

In Last-in-First-Out method, the cost of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation:

Weighted-average Cost=Total Cost of Goods Available For SaleTotal Number of Units Available For Sale

The cost of goods sold, ending merchandise inventory and gross profit under FIFO method using perpetual inventory system.

Answer 7

Chapter 6, Problem 6.33BP

1.

To determine

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

In First-in-First-Out method, the cost of initial purchased items are sold first. The value of the ending inventory consists the recent purchased items.

In Last-in-First-Out method, the cost of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation:

Weighted-average Cost=Total Cost of Goods Available For SaleTotal Number of Units Available For Sale

The cost of goods sold, ending merchandise inventory and gross profit under FIFO method using perpetual inventory system.

Answer 8

2.

To determine

The cost of goods sold, ending merchandise inventory and gross profit under LIFO method using perpetual inventory system.

Answer 9

2.

To determine

The cost of goods sold, ending merchandise inventory and gross profit under LIFO method using perpetual inventory system.

Answer 10

3.

To determine

The cost of goods sold, ending merchandise inventory and gross profit under weighted average method using perpetual inventory system.

Answer 11

3.

To determine

The cost of goods sold, ending merchandise inventory and gross profit under weighted average method using perpetual inventory system.

Answer 12

4.

To determine

To Explain: The method that the company should use to pay least amount of income taxes.

Answer 13

4.

To determine

To Explain: The method that the company should use to pay least amount of income taxes.

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 17

Ch. 6 - Which principle or concept states that businesses...Ch. 6 - Which inventory costing method assigns to ending...Ch. 6 - Assume Nile.com began April with 14 units of...Ch. 6 - Suppose Nile.com used the weighted-average...Ch. 6 - Which inventory costing method results in the...Ch. 6 - Prob. 6QC Ch. 6 - 7. At December 31, 2018, Stevenson Company...Ch. 6 - Suppose Maestros had cost of goods sold during the...Ch. 6 - Suppose Nile.com used the LIFO inventory costing...Ch. 6 - Prob. 1RQ

Concept explainers

Videos

The cost of goods sold, ending merchandise inventory and gross profit under LIFO method using perpetual inventory system.

The cost of goods sold, ending merchandise inventory and gross profit under weighted average method using perpetual inventory system.

To Explain: The method that the company should use to pay least amount of income taxes.

Want to see the full answer?

Chapter 6 Solutions