Periodic Inventory System: Periodic inventory system 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. 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. Moving -average cost method: Under moving average cost method, the company calculates a new average cost after every purchase is made. It is determined by dividing the cost of goods available for sale by the units on hand. Following is the mathematical representation: To Calculate: The ending inventory, cost of goods sold, gross profit, and gross profit rate under LIFO, FIFO, and Average-cost method.

Question

Want to see the full answer?

Answer 1

Question

Chapter 6, Problem 6.5AP

(a)

To determine

Periodic Inventory System:

Periodic inventory system 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.

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.

Moving -average cost method:

Under moving average cost method, the company calculates a new average cost after every purchase is made. It is determined by dividing the cost of goods available for sale by the units on hand. Following is the mathematical representation:

To Calculate: The ending inventory, cost of goods sold, gross profit, and gross profit rate under LIFO, FIFO, and Average-cost method.

(b)

To determine

To Compare: The results for the above three cost flow assumptions.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

None

Accounting question

Hello ticher given correct answer general Accounting

Answer 2

Question

Chapter 6, Problem 6.5AP

(a)

To determine

Periodic Inventory System:

Periodic inventory system 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.

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.

Moving -average cost method:

Under moving average cost method, the company calculates a new average cost after every purchase is made. It is determined by dividing the cost of goods available for sale by the units on hand. Following is the mathematical representation:

To Calculate: The ending inventory, cost of goods sold, gross profit, and gross profit rate under LIFO, FIFO, and Average-cost method.

(b)

To determine

To Compare: The results for the above three cost flow assumptions.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 6, Problem 6.5AP

(a)

To determine

Periodic Inventory System:

Periodic inventory system 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.

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.

Moving -average cost method:

Under moving average cost method, the company calculates a new average cost after every purchase is made. It is determined by dividing the cost of goods available for sale by the units on hand. Following is the mathematical representation:

To Calculate: The ending inventory, cost of goods sold, gross profit, and gross profit rate under LIFO, FIFO, and Average-cost method.

(b)

To determine

To Compare: The results for the above three cost flow assumptions.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 6, Problem 6.5AP

(a)

To determine

Periodic Inventory System:

Periodic inventory system 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.

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.

Moving -average cost method:

Under moving average cost method, the company calculates a new average cost after every purchase is made. It is determined by dividing the cost of goods available for sale by the units on hand. Following is the mathematical representation:

To Calculate: The ending inventory, cost of goods sold, gross profit, and gross profit rate under LIFO, FIFO, and Average-cost method.

(b)

To determine

To Compare: The results for the above three cost flow assumptions.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 6, Problem 6.5AP

(a)

To determine

Periodic Inventory System:

Periodic inventory system 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.

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.

Moving -average cost method:

Under moving average cost method, the company calculates a new average cost after every purchase is made. It is determined by dividing the cost of goods available for sale by the units on hand. Following is the mathematical representation:

To Calculate: The ending inventory, cost of goods sold, gross profit, and gross profit rate under LIFO, FIFO, and Average-cost method.

(b)

To determine

To Compare: The results for the above three cost flow assumptions.

Answer 6

Chapter 6, Problem 6.5AP

(a)

To determine

Periodic Inventory System:

Periodic inventory system 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.

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.

Moving -average cost method:

Under moving average cost method, the company calculates a new average cost after every purchase is made. It is determined by dividing the cost of goods available for sale by the units on hand. Following is the mathematical representation:

To Calculate: The ending inventory, cost of goods sold, gross profit, and gross profit rate under LIFO, FIFO, and Average-cost method.

Answer 7

Chapter 6, Problem 6.5AP

(a)

To determine

Periodic Inventory System:

Periodic inventory system 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.

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.

Moving -average cost method:

Under moving average cost method, the company calculates a new average cost after every purchase is made. It is determined by dividing the cost of goods available for sale by the units on hand. Following is the mathematical representation:

To Calculate: The ending inventory, cost of goods sold, gross profit, and gross profit rate under LIFO, FIFO, and Average-cost method.

Answer 8

(b)

To determine

To Compare: The results for the above three cost flow assumptions.

Answer 9

(b)

To determine

To Compare: The results for the above three cost flow assumptions.

Answer 10

Expert Solution & Answer

Answer 11

Expert Solution & Answer

Answer 12

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 13

Ch. 6 - Prob. 1Q Ch. 6 - 2. An item must possess two characteristics to be...Ch. 6 - Prob. 3Q Ch. 6 - 4. (a) Rochelle Company ships merchandise to Jay...Ch. 6 - 5. Katz Hat Shop received a shipment of hats for...Ch. 6 - 6. Explain the difference between the terms FOB...Ch. 6 - 7. Kyle Ebert believes that the allocation of cost...Ch. 6 - 8. What is the major advantage and major...Ch. 6 - 9. “The selection of an inventory cost flow method...Ch. 6 - 10. Winch assumed inventory cost flow...

Concept explainers

Videos

To Compare: The results for the above three cost flow assumptions.

Want to see the full answer?

Chapter 6 Solutions