Financial & Managerial Accounting
14th Edition
ISBN: 9781337119207
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 6, Problem 6.3TIF
Communication
Golden Eagle Company began operations on April 1 by selling a single product. Data on purchases and sales for the year are as follows:
Purchases:
| Date | Units Purchased | Unit Cost | Total Cost |
| April 6 | 31,000 | $36.60 | $1,134,600 |
| May 18 | 33,000 | 39.00 | 1,287,000 |
| June 6 | 40,000 | 39.60 | 1,584,000 |
| July 10 | 40,000 | 42.00 | 1,680,000 |
| August 10 | 27,200 | 42.75 | 1,162,800 |
| October 25 | 12,800 | 43.50 | 556,800 |
| November 4 | 8,000 | 44.85 | 358,800 |
| December 10 | 8,000 | 48.00 | 384,000 |
| 200,000 | $8,148,000 |
Sales:
| April | 16,000 units |
| May | 16,000 |
| June | 20,000 |
| July | 24,000 |
| August | 28,000 |
| September | 28,000 |
| October | 18,000 |
| November | 10,000 |
| December | 8,000 |
| Total Units | 168,000 |
| Total sales | $10,000,000 |
The president of the company, Connie Kilmer, has asked for your advice on which inventory cost flow method should be used for the 32,000-unit physical inventory that was taken on December 31. The company plans to expand its product line in the future and uses the periodic inventory system.
Write a brief memo to Ms. Kilmer comparing and contrasting the LIFO and FIFO inventory cost flow methods and their potential impacts on the company’s financial statements.
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Students have asked these similar questions
Golden Eagle Company began operations on April 1 by selling a single product. Data on
purchases and sales for the year are as follows:
Purchases:
Units Purchased
Total Cost
Date
Unit Cost
April 6
May 18
$1,134,600
$36.60
31,000
1,287,000
33,000
39.00
June 6
40,000
39.60
1,584,000
July 10
August 10
40,000
42.00
1,680,000
27,200
42.75
1,162,800
October 25
12,800
43.50
556,800
November 4
8,000
44.85
358,800
December 10
384,000
8,000
48.00
200,000
$8,148,000
Sales:
April
16,000 units
May
16,000
June
20,000
July
24,000
August
28,000
September
28,000
October
18,000
November
10,000
December
8,000
Total units
168,000
Total sales
$10,000,000
The president of the company, Connie Kilmer, has asked for your advice on which inventory
cost flow method should be used for the 32,000-unit physical inventory that was taken on
December 31. The company plans to expand its product line in the future and uses the
periodic inventory system.
Write a brief memo to Ms. Kilmer comparing and contrasting the LIFO…
FInd the Weighted average cost per unit
Shown below are information provided by the bookkeeper of Luna Corporation:
A. Sales for the month of December totaled 286,000 units.
B. The following purchases were made in December:
Date Quantity Unit Cost
12/4 50,000 P13.00
12/8 62,500 12.50
12/11 75,000 12.00
12/24 70,000 12.40
C. There were 108,500 units on hand on December 1 with a total cost of P1,450,000.
D. The company uses a periodic FIFO costing system. Its gross…
Chapter 6 Solutions
Financial & Managerial Accounting
Ch. 6 - Before inventory purchases are recorded, the...Ch. 6 - Why is it important to periodically take a...Ch. 6 - Do the terms FIFO, LIFO, and weighted average...Ch. 6 - If inventory is being valued at cost and the price...Ch. 6 - Which of the three methods of inventory...Ch. 6 - If inventory is being valued at cost and the price...Ch. 6 - Using the following data, how should the inventory...Ch. 6 - Prob. 8DQCh. 6 - Hutch Co. sold merchandise to Bibbins Company on...Ch. 6 - A manufacturer shipped merchandise to a retailer...
Ch. 6 - Cost flow methods The following three identical...Ch. 6 - Perpetual inventory using FIFO Beginning...Ch. 6 - Perpetual inventory using LIFO Beginning...Ch. 6 - Perpetual inventory using weighted average...Ch. 6 - Periodic inventory using FIFO, UFO, and weighted...Ch. 6 - Lower-of-cost-or-market method On the basis of the...Ch. 6 - Effect of inventory errors During the taking of...Ch. 6 - Control of inventories Triple Creek Hardware Store...Ch. 6 - Prob. 6.2EXCh. 6 - Perpetual inventory using FIFO Beginning...Ch. 6 - Perpetual inventory using LIFO Assume that the...Ch. 6 - Perpetual inventory using LIFO Beginning...Ch. 6 - Prob. 6.6EXCh. 6 - FIFO and UFO costs under perpetual inventory...Ch. 6 - Weighted average cost flow method under perpetual...Ch. 6 - Weighted average cost flow method under perpetual...Ch. 6 - Prob. 6.10EXCh. 6 - Perpetual inventory using LIFO Assume that the...Ch. 6 - Periodic inventory by three methods The units of...Ch. 6 - Periodic inventory by three methods; cost of goods...Ch. 6 - Comparing inventory methods Assume that a firm...Ch. 6 - Lower-of-cost-or-market inventory On the basis of...Ch. 6 - Prob. 6.16EXCh. 6 - Effect of errors n physical inventory Madison...Ch. 6 - Effect of errors in physical inventory Fonda...Ch. 6 - Prob. 6.19EXCh. 6 - Prob. 6.20EXCh. 6 - Retail method A business using the retail method...Ch. 6 - Retail method A business using the retail method...Ch. 6 - Retail method On the basis of the following data,...Ch. 6 - Gross profit method The inventory was destroyed by...Ch. 6 - Prob. 6.25EXCh. 6 - Gross profit method Based on the following data,...Ch. 6 - FIFO perpetual inventory The beginning inventory...Ch. 6 - LIFO perpetual inventory The beginning inventory...Ch. 6 - Weighted average cost method with perpetual...Ch. 6 - Periodic inventory by three methods The beginning...Ch. 6 - Periodic inventory by three methods Dymac...Ch. 6 - Lower-of-cost-or-market inventory Data on the...Ch. 6 - Retail method; gross profit method Selected data...Ch. 6 - FIFO perpetual inventory The beginning inventory...Ch. 6 - LIFO perpetual inventory The beginning inventory...Ch. 6 - Weighted average cost method with perpetual...Ch. 6 - Periodic inventory by three methods The beginning...Ch. 6 - Prob. 6.5BPRCh. 6 - Lower-of-cost-or-market inventory Data on the...Ch. 6 - Prob. 6.7BPRCh. 6 - Prob. 1ADMCh. 6 - Costco, Walmart, Nordstrom: Inventory turnover and...Ch. 6 - Prob. 3ADMCh. 6 - Hewlett-Packard and Apple: Inventory turnover and...Ch. 6 - Prob. 6.1TIFCh. 6 - Communication Golden Eagle Company began...
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