(a) (1)
Periodic Inventory System: It 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.
In First-in-First-Out method, the cost of initial purchased items are sold first. The value of the ending inventory consists the recent purchased items.
To Determine: The selection of diamonds for selling that should follow by J Gems to maximize the gross profit.
(2)
The selection of diamonds for selling that should follow by J Gems to minimize the gross profit.
(b)
To Calculate: The cost of goods sold and gross profit under FIFO method.
(c)
To Calculate: The cost of goods sold and gross profit under LIFO method.
(d)
To Explain: The cost flow method that should use by J Gems.

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Chapter 6 Solutions
FINANCIAL ACCOUNTING:TOOLS FOR BUSINESS
- Pertanis to Marcharrow_forwardGeneral accounting questionarrow_forwardOn 2015/1/1, Samantha Ltd. purchased machinery for $60,000. The useful life is 8 years with a salvage value of $6,000. The company uses the double declining balance method. What is the second year's annual depreciation expense (2016/12/31)? Answerarrow_forward
- On January 3, 2020, Salma Industries acquired equipment for $420,000. The estimated useful life of the equipment is 6 years or 100,000 machine hours, with a residual value of $30,000. What is the book value of the asset on December 31, 2021, if Salma Industries uses the straight-line method of depreciation? Need helparrow_forwardFinancial Accounting Questionarrow_forwardAt the end of last year, the company's assets totaled $945,000 and its liabilities totaled $812,500. During the current year, the company's total assets increased by $48,200 and its total liabilities increased by $30,400. At the end of the current year, stockholders' equity was___. a. $150,300 b. $181,000 c. $128,300 d. $213,700arrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College