FIFO : In First-in-First-Out method, items purchased initially are sold first. So, the value of the ending inventory consists the recent cost for the remaining unsold items. LIFO : In Last-in-First-Out method, items purchased recently are sold first. So, the value of the ending inventory consists the initial cost for the remaining unsold items. Income statement : The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement. To prepare: The comparative condensed income statements for Incorporation W for the year ended December 31, 2014, under FIFO and LIFO.

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Answer 1

Question

Chapter 6, Problem 6.4BP

(a)

To determine

FIFO: In First-in-First-Out method, items purchased initially are sold first. So, the value of the ending inventory consists the recent cost for the remaining unsold items.

LIFO: In Last-in-First-Out method, items purchased recently are sold first. So, the value of the ending inventory consists the initial cost for the remaining unsold items.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

To prepare: The comparative condensed income statements for Incorporation W for the year ended December 31, 2014, under FIFO and LIFO.

(b)

To determine

To write: A letter to the management of Incorporation W, explaining the answers to the given questions.

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Answer 2

Question

Chapter 6, Problem 6.4BP

(a)

To determine

FIFO: In First-in-First-Out method, items purchased initially are sold first. So, the value of the ending inventory consists the recent cost for the remaining unsold items.

LIFO: In Last-in-First-Out method, items purchased recently are sold first. So, the value of the ending inventory consists the initial cost for the remaining unsold items.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

To prepare: The comparative condensed income statements for Incorporation W for the year ended December 31, 2014, under FIFO and LIFO.

(b)

To determine

To write: A letter to the management of Incorporation W, explaining the answers to the given questions.

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Answer 3

Question

Chapter 6, Problem 6.4BP

(a)

To determine

FIFO: In First-in-First-Out method, items purchased initially are sold first. So, the value of the ending inventory consists the recent cost for the remaining unsold items.

LIFO: In Last-in-First-Out method, items purchased recently are sold first. So, the value of the ending inventory consists the initial cost for the remaining unsold items.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

To prepare: The comparative condensed income statements for Incorporation W for the year ended December 31, 2014, under FIFO and LIFO.

(b)

To determine

To write: A letter to the management of Incorporation W, explaining the answers to the given questions.

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Answer 4

Question

Chapter 6, Problem 6.4BP

(a)

To determine

FIFO: In First-in-First-Out method, items purchased initially are sold first. So, the value of the ending inventory consists the recent cost for the remaining unsold items.

LIFO: In Last-in-First-Out method, items purchased recently are sold first. So, the value of the ending inventory consists the initial cost for the remaining unsold items.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

To prepare: The comparative condensed income statements for Incorporation W for the year ended December 31, 2014, under FIFO and LIFO.

(b)

To determine

To write: A letter to the management of Incorporation W, explaining the answers to the given questions.

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Answer 5

Chapter 6, Problem 6.4BP

(a)

To determine

FIFO: In First-in-First-Out method, items purchased initially are sold first. So, the value of the ending inventory consists the recent cost for the remaining unsold items.

LIFO: In Last-in-First-Out method, items purchased recently are sold first. So, the value of the ending inventory consists the initial cost for the remaining unsold items.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

To prepare: The comparative condensed income statements for Incorporation W for the year ended December 31, 2014, under FIFO and LIFO.

(b)

To determine

To write: A letter to the management of Incorporation W, explaining the answers to the given questions.

Answer 6

Chapter 6, Problem 6.4BP

(a)

To determine

FIFO: In First-in-First-Out method, items purchased initially are sold first. So, the value of the ending inventory consists the recent cost for the remaining unsold items.

LIFO: In Last-in-First-Out method, items purchased recently are sold first. So, the value of the ending inventory consists the initial cost for the remaining unsold items.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

To prepare: The comparative condensed income statements for Incorporation W for the year ended December 31, 2014, under FIFO and LIFO.

Answer 7

Chapter 6, Problem 6.4BP

(a)

To determine

FIFO: In First-in-First-Out method, items purchased initially are sold first. So, the value of the ending inventory consists the recent cost for the remaining unsold items.

LIFO: In Last-in-First-Out method, items purchased recently are sold first. So, the value of the ending inventory consists the initial cost for the remaining unsold items.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

To prepare: The comparative condensed income statements for Incorporation W for the year ended December 31, 2014, under FIFO and LIFO.

Answer 8

(b)

To determine

To write: A letter to the management of Incorporation W, explaining the answers to the given questions.

Answer 9

(b)

To determine

To write: A letter to the management of Incorporation W, explaining the answers to the given questions.

Answer 10

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Answer 11

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Answer 12

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Answer 13

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To write: A letter to the management of Incorporation W, explaining the answers to the given questions.

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