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.
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.
Solution Summary: The author explains that periodic inventory system is an accounting method used to determine the amount of inventory at the end of each accounting period.
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.
Omega manufacturing uses weighted average solution this general accounting question
The Niba Department started the month with a beginning Work in Process inventory of $15,000. During the month, it was assigned the following costs: direct materials, $120,000; direct labor, $40,000; overhead allocated at the rate of 20% of direct labor cost. Inventory with a cost of $160,000 was transferred to finished goods. What was the ending balance of Work in Process inventory for the department? What is solution?
The Niba Department started the month with a beginning Work in Process inventory of $15,000. During the month, it was assigned the following costs: direct materials, $120,000; direct labor, $40,000; overhead allocated at the rate of 20% of direct labor cost. Inventory with a cost of $160,000 was transferred to finished goods. What was the ending balance of Work in Process inventory for the department?
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