First-in-First-Out: In First-in-First-Out method, the costs of the initially purchased items are considered as cost of goods sold, for the items which are sold first. The value of the ending inventory consists of the recent purchased items. Last-in-Last-Out: In Last-in-First-Out method, the costs of last purchased items are considered as the cost of goods sold, for the items which are sold first. The value of the closing stock consists of the initial purchased items. The Income statement: The income statement is a financial statement that shows the net income earned or net loss suffered by a company through reporting all the revenues earned, and expenses incurred by the company over a specific period of time. An income statement is also known as an operation statement, an earnings statement, a revenue statement, or a profit and loss statement. The net income is the excess of revenue over expenses. To Prepare: The comparative condensed income statements for 2019 under FIFO and LIFO.

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 6, Problem 6.4AP

(a)

To determine

First-in-First-Out:

In First-in-First-Out method, the costs of the initially purchased items are considered as cost of goods sold, for the items which are sold first. The value of the ending inventory consists of the recent purchased items.

Last-in-Last-Out:

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

The Income statement:

The income statement is a financial statement that shows the net income earned or net loss suffered by a company through reporting all the revenues earned, and expenses incurred by the company over a specific period of time. An income statement is also known as an operation statement, an earnings statement, a revenue statement, or a profit and loss statement. The net income is the excess of revenue over expenses.

To Prepare: The comparative condensed income statements for 2019 under FIFO and LIFO.

(b) (1)

To determine

To Explain: the reason for the method of inventory cost flow, which produces the more meaningful inventory amount for the balance sheet.

(2)

To determine

To Explain: the reason for the method of inventory cost flow, which produces the more meaningful net income.

(3)

To determine

To Explain: the reason for the method of inventory cost flow which is most likely to approximate the actual physical flow of the goods.

(4)

To determine

To explain: the reason for the excess of cash available under LIFO than under FIFO.

(5)

To determine

To discuss: Whether the gross profit under the average-cost method will be higher or lower than FIFO and LIFO.

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respond to ceasar Companies make adjusting entries to ensure that their financial statements accurately reflect the true financial position and performance during a specific accounting period. These entries are necessary to account for revenues earned and expenses incurred that may not yet have been recorded in the books. Adjusting entries are typically made at the end of an accounting period, during the preparation of financial statements, as part of the accounting cycle. This step is crucial in aligning the company’s books with the accrual basis of accounting, where revenues and expenses are recognized when they are earned or incurred, rather than when cash is received or paid. By making these adjustments, companies can provide accurate and reliable financial information to stakeholders.

According to the accrual method of accounting, businesses make adjusting entries to ensure that their financial statements are correctly depicting their financial situation and performance. No matter when cash transactions take place, adjusting entries are required to record revenues when they are generated and expenses when they are incurred (Weygandt et al., 2022). In order to guarantee that financial statements present an accurate and impartial picture of their company's financial health, these entries help in bringing financial records into compliance with the revenue recognition and matching standards. In order to account for things like accumulated revenues, accrued expenses, depreciation, and prepaid expenses, adjusting entries are usually made at the conclusion of an accounting period prior to the preparation of financial statements (Kieso et al., 2020). By implementing these changes, businesses avoid making false representations in their financial reports, which enables…

Required information Skip to question [The following information applies to the questions displayed below.]Brianna's Boutique has the following transactions related to its top-selling Gucci purse for the month of October. Brianna's Boutique uses a periodic inventory system. Date Transactions Units Unit Cost Total Cost October 1 Beginning inventory 6 $830 $4,980 October 4 Sale 4 October 10 Purchase 5 840 4,200 October 13 Sale 3 October 20 Purchase 4 850 3,400 October 28 Sale 7 October 30 Purchase 6 860 5,160 $17,740 2. Using FIFO, calculate ending inventory and cost of goods sold at October 31.

Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 6, Problem 6.4AP

(a)

To determine

First-in-First-Out:

In First-in-First-Out method, the costs of the initially purchased items are considered as cost of goods sold, for the items which are sold first. The value of the ending inventory consists of the recent purchased items.

Last-in-Last-Out:

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

The Income statement:

The income statement is a financial statement that shows the net income earned or net loss suffered by a company through reporting all the revenues earned, and expenses incurred by the company over a specific period of time. An income statement is also known as an operation statement, an earnings statement, a revenue statement, or a profit and loss statement. The net income is the excess of revenue over expenses.

To Prepare: The comparative condensed income statements for 2019 under FIFO and LIFO.

(b) (1)

To determine

To Explain: the reason for the method of inventory cost flow, which produces the more meaningful inventory amount for the balance sheet.

(2)

To determine

To Explain: the reason for the method of inventory cost flow, which produces the more meaningful net income.

(3)

To determine

To Explain: the reason for the method of inventory cost flow which is most likely to approximate the actual physical flow of the goods.

(4)

To determine

To explain: the reason for the excess of cash available under LIFO than under FIFO.

(5)

To determine

To discuss: Whether the gross profit under the average-cost method will be higher or lower than FIFO and LIFO.

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 6, Problem 6.4AP

(a)

To determine

First-in-First-Out:

In First-in-First-Out method, the costs of the initially purchased items are considered as cost of goods sold, for the items which are sold first. The value of the ending inventory consists of the recent purchased items.

Last-in-Last-Out:

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

The Income statement:

The income statement is a financial statement that shows the net income earned or net loss suffered by a company through reporting all the revenues earned, and expenses incurred by the company over a specific period of time. An income statement is also known as an operation statement, an earnings statement, a revenue statement, or a profit and loss statement. The net income is the excess of revenue over expenses.

To Prepare: The comparative condensed income statements for 2019 under FIFO and LIFO.

(b) (1)

To determine

To Explain: the reason for the method of inventory cost flow, which produces the more meaningful inventory amount for the balance sheet.

(2)

To determine

To Explain: the reason for the method of inventory cost flow, which produces the more meaningful net income.

(3)

To determine

To Explain: the reason for the method of inventory cost flow which is most likely to approximate the actual physical flow of the goods.

(4)

To determine

To explain: the reason for the excess of cash available under LIFO than under FIFO.

(5)

To determine

To discuss: Whether the gross profit under the average-cost method will be higher or lower than FIFO and LIFO.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 6, Problem 6.4AP

(a)

To determine

First-in-First-Out:

In First-in-First-Out method, the costs of the initially purchased items are considered as cost of goods sold, for the items which are sold first. The value of the ending inventory consists of the recent purchased items.

Last-in-Last-Out:

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

The Income statement:

The income statement is a financial statement that shows the net income earned or net loss suffered by a company through reporting all the revenues earned, and expenses incurred by the company over a specific period of time. An income statement is also known as an operation statement, an earnings statement, a revenue statement, or a profit and loss statement. The net income is the excess of revenue over expenses.

To Prepare: The comparative condensed income statements for 2019 under FIFO and LIFO.

(b) (1)

To determine

To Explain: the reason for the method of inventory cost flow, which produces the more meaningful inventory amount for the balance sheet.

(2)

To determine

To Explain: the reason for the method of inventory cost flow, which produces the more meaningful net income.

(3)

To determine

To Explain: the reason for the method of inventory cost flow which is most likely to approximate the actual physical flow of the goods.

(4)

To determine

To explain: the reason for the excess of cash available under LIFO than under FIFO.

(5)

To determine

To discuss: Whether the gross profit under the average-cost method will be higher or lower than FIFO and LIFO.

Expert Solution & Answer

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See solution

Answer 5

Chapter 6, Problem 6.4AP

(a)

To determine

First-in-First-Out:

In First-in-First-Out method, the costs of the initially purchased items are considered as cost of goods sold, for the items which are sold first. The value of the ending inventory consists of the recent purchased items.

Last-in-Last-Out:

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

The Income statement:

The income statement is a financial statement that shows the net income earned or net loss suffered by a company through reporting all the revenues earned, and expenses incurred by the company over a specific period of time. An income statement is also known as an operation statement, an earnings statement, a revenue statement, or a profit and loss statement. The net income is the excess of revenue over expenses.

To Prepare: The comparative condensed income statements for 2019 under FIFO and LIFO.

(b) (1)

To determine

To Explain: the reason for the method of inventory cost flow, which produces the more meaningful inventory amount for the balance sheet.

(2)

To determine

To Explain: the reason for the method of inventory cost flow, which produces the more meaningful net income.

(3)

To determine

To Explain: the reason for the method of inventory cost flow which is most likely to approximate the actual physical flow of the goods.

(4)

To determine

To explain: the reason for the excess of cash available under LIFO than under FIFO.

(5)

To determine

To discuss: Whether the gross profit under the average-cost method will be higher or lower than FIFO and LIFO.

Answer 6

Chapter 6, Problem 6.4AP

(a)

To determine

First-in-First-Out:

In First-in-First-Out method, the costs of the initially purchased items are considered as cost of goods sold, for the items which are sold first. The value of the ending inventory consists of the recent purchased items.

Last-in-Last-Out:

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

The Income statement:

The income statement is a financial statement that shows the net income earned or net loss suffered by a company through reporting all the revenues earned, and expenses incurred by the company over a specific period of time. An income statement is also known as an operation statement, an earnings statement, a revenue statement, or a profit and loss statement. The net income is the excess of revenue over expenses.

To Prepare: The comparative condensed income statements for 2019 under FIFO and LIFO.

Answer 7

Chapter 6, Problem 6.4AP

(a)

To determine

First-in-First-Out:

In First-in-First-Out method, the costs of the initially purchased items are considered as cost of goods sold, for the items which are sold first. The value of the ending inventory consists of the recent purchased items.

Last-in-Last-Out:

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

The Income statement:

The income statement is a financial statement that shows the net income earned or net loss suffered by a company through reporting all the revenues earned, and expenses incurred by the company over a specific period of time. An income statement is also known as an operation statement, an earnings statement, a revenue statement, or a profit and loss statement. The net income is the excess of revenue over expenses.

To Prepare: The comparative condensed income statements for 2019 under FIFO and LIFO.

Answer 8

(b) (1)

To determine

To Explain: the reason for the method of inventory cost flow, which produces the more meaningful inventory amount for the balance sheet.

Answer 9

(b) (1)

To determine

To Explain: the reason for the method of inventory cost flow, which produces the more meaningful inventory amount for the balance sheet.

Answer 10

(2)

To determine

To Explain: the reason for the method of inventory cost flow, which produces the more meaningful net income.

Answer 11

(2)

To determine

To Explain: the reason for the method of inventory cost flow, which produces the more meaningful net income.

Answer 12

(3)

To determine

To Explain: the reason for the method of inventory cost flow which is most likely to approximate the actual physical flow of the goods.

Answer 13

(3)

To determine

To Explain: the reason for the method of inventory cost flow which is most likely to approximate the actual physical flow of the goods.

Answer 14

(4)

To determine

To explain: the reason for the excess of cash available under LIFO than under FIFO.

Answer 15

(4)

To determine

To explain: the reason for the excess of cash available under LIFO than under FIFO.

Answer 16

(5)

To determine

To discuss: Whether the gross profit under the average-cost method will be higher or lower than FIFO and LIFO.

Answer 17

(5)

To determine

To discuss: Whether the gross profit under the average-cost method will be higher or lower than FIFO and LIFO.

Answer 18

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Answer 19

Expert Solution & Answer

Answer 20

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Answer 21

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To Explain: the reason for the method of inventory cost flow, which produces the more meaningful inventory amount for the balance sheet.

To Explain: the reason for the method of inventory cost flow, which produces the more meaningful net income.

To Explain: the reason for the method of inventory cost flow which is most likely to approximate the actual physical flow of the goods.

To explain: the reason for the excess of cash available under LIFO than under FIFO.

To discuss: Whether the gross profit under the average-cost method will be higher or lower than FIFO and LIFO.

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