Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period. 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 amount of ending merchandise inventory and cost of goods sold for the month of October using FIFO, LIFO, and weighted-average inventory costing methods.

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Answer 1

Question

Chapter 6, Problem 6.37BP

1.

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

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 amount of ending merchandise inventory and cost of goods sold for the month of October using FIFO, LIFO, and weighted-average inventory costing methods.

2.

To determine

To Calculate: The gross profit for October using the three methods.

3.

To determine

To Explain: The method that will result lowest amount of income taxes.

To determine

To Explain: The method that will result in the highest net income.

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Question-38 From what base amount is salvage value deducted when calculating depreciation? a) Market value of asset b) Historical cost of asset c) Replacement cost d) Insurance value

a. A two-year insurance premium of $6,200 was paid on January 1, 2021, for coverage beginning on that date. As of December 31, 2021, the unadjusted balances were $6,200 for Prepaid Insurance and $0 for Insurance Expense. b. At December 31, 2021, you obtained the following data relating to supplies. Unadjusted balance in Supplies on December 31 Unadjusted balance in Supplies Expense on December 31 Supplies on hand, counted on December 31 Required: $ 10,000 62,000 6,000 1. Of the $6,200 paid for insurance, what amount should be reported on the 2021 income statement as Insurance Expense? What amount should be reported on the December 31, 2021, balance sheet as Prepaid Insurance? 2. What amount should be reported on the 2021 income statement as Supplies Expense? What amount should be reported on the December 31, 2021, balance sheet as Supplies? 3. Indicate the accounting equation effects of the adjustment required for (a) insurance and (b) supplies. Complete this question by entering your…

Answer 2

Question

Chapter 6, Problem 6.37BP

1.

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

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 amount of ending merchandise inventory and cost of goods sold for the month of October using FIFO, LIFO, and weighted-average inventory costing methods.

2.

To determine

To Calculate: The gross profit for October using the three methods.

3.

To determine

To Explain: The method that will result lowest amount of income taxes.

To determine

To Explain: The method that will result in the highest net income.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 6, Problem 6.37BP

1.

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

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 amount of ending merchandise inventory and cost of goods sold for the month of October using FIFO, LIFO, and weighted-average inventory costing methods.

2.

To determine

To Calculate: The gross profit for October using the three methods.

3.

To determine

To Explain: The method that will result lowest amount of income taxes.

To determine

To Explain: The method that will result in the highest net income.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 6, Problem 6.37BP

1.

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

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 amount of ending merchandise inventory and cost of goods sold for the month of October using FIFO, LIFO, and weighted-average inventory costing methods.

2.

To determine

To Calculate: The gross profit for October using the three methods.

3.

To determine

To Explain: The method that will result lowest amount of income taxes.

To determine

To Explain: The method that will result in the highest net income.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 6, Problem 6.37BP

1.

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

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 amount of ending merchandise inventory and cost of goods sold for the month of October using FIFO, LIFO, and weighted-average inventory costing methods.

2.

To determine

To Calculate: The gross profit for October using the three methods.

3.

To determine

To Explain: The method that will result lowest amount of income taxes.

To determine

To Explain: The method that will result in the highest net income.

Answer 6

Chapter 6, Problem 6.37BP

1.

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

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 amount of ending merchandise inventory and cost of goods sold for the month of October using FIFO, LIFO, and weighted-average inventory costing methods.

Answer 7

Chapter 6, Problem 6.37BP

1.

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

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 amount of ending merchandise inventory and cost of goods sold for the month of October using FIFO, LIFO, and weighted-average inventory costing methods.

Answer 8

2.

To determine

To Calculate: The gross profit for October using the three methods.

Answer 9

2.

To determine

To Calculate: The gross profit for October using the three methods.

Answer 10

3.

To determine

To Explain: The method that will result lowest amount of income taxes.

Answer 11

3.

To determine

To Explain: The method that will result lowest amount of income taxes.

Answer 12

To determine

To Explain: The method that will result in the highest net income.

Answer 13

To determine

To Explain: The method that will result in the highest net income.

Answer 14

Expert Solution & Answer

Answer 15

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Answer 16

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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 - At December 31, 2016, Stevenson Company overstated...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

Solution Summary: The author explains how to calculate the amount of ending inventory and cost of goods sold for the month of October using FIFO, LIFO and weighted-average inventory costing methods.

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To Calculate: The gross profit for October using the three methods.

To Explain: The method that will result lowest amount of income taxes.

To Explain: The method that will result in the highest net income.

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