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. Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization. The various inventory cost flow methods are: First-in, first-out (FIFO) Last in, first-out (LIFO) Average-cost FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization. LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period. To determine: The cost of ending inventory and cost of goods sold under the (1) FIFO method

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Answer 1

Question

Chapter 6, Problem 6.7E

(a)

(1)

To determine

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.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To determine: The cost of ending inventory and cost of goods sold under the (1) FIFO method

(2)

To determine

The cost of ending inventory and cost of goods sold under LIFO method

(3)

To determine

The cost of ending inventory and cost of goods sold under average-cost method.

(b)

To determine

The costing method which will report highest net income.

(c)

To determine

The costing method which will report inventories close to current cost.

(d)

To determine

The costing method which will result in least taxes in first year.

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BlueSky Corp. has $1.5 million in current assets and $700,000 in fixed assets, less $250,000 in accumulated depreciation. The firm's current liabilities total $350,000, and long-term liabilities total $450,000. What is the firm's equity? a) $1,150,000 b) $1,450,000 c) $1,250,000 d) $1,050,000

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Answer 2

Question

Chapter 6, Problem 6.7E

(a)

(1)

To determine

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.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To determine: The cost of ending inventory and cost of goods sold under the (1) FIFO method

(2)

To determine

The cost of ending inventory and cost of goods sold under LIFO method

(3)

To determine

The cost of ending inventory and cost of goods sold under average-cost method.

(b)

To determine

The costing method which will report highest net income.

(c)

To determine

The costing method which will report inventories close to current cost.

(d)

To determine

The costing method which will result in least taxes in first year.

Expert Solution & Answer

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Answer 3

Question

Chapter 6, Problem 6.7E

(a)

(1)

To determine

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.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To determine: The cost of ending inventory and cost of goods sold under the (1) FIFO method

(2)

To determine

The cost of ending inventory and cost of goods sold under LIFO method

(3)

To determine

The cost of ending inventory and cost of goods sold under average-cost method.

(b)

To determine

The costing method which will report highest net income.

(c)

To determine

The costing method which will report inventories close to current cost.

(d)

To determine

The costing method which will result in least taxes in first year.

Expert Solution & Answer

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Answer 4

Question

Chapter 6, Problem 6.7E

(a)

(1)

To determine

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.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To determine: The cost of ending inventory and cost of goods sold under the (1) FIFO method

(2)

To determine

The cost of ending inventory and cost of goods sold under LIFO method

(3)

To determine

The cost of ending inventory and cost of goods sold under average-cost method.

(b)

To determine

The costing method which will report highest net income.

(c)

To determine

The costing method which will report inventories close to current cost.

(d)

To determine

The costing method which will result in least taxes in first year.

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 6.7E

(a)

(1)

To determine

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.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To determine: The cost of ending inventory and cost of goods sold under the (1) FIFO method

(2)

To determine

The cost of ending inventory and cost of goods sold under LIFO method

(3)

To determine

The cost of ending inventory and cost of goods sold under average-cost method.

(b)

To determine

The costing method which will report highest net income.

(c)

To determine

The costing method which will report inventories close to current cost.

(d)

To determine

The costing method which will result in least taxes in first year.

Answer 6

Chapter 6, Problem 6.7E

(a)

(1)

To determine

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.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To determine: The cost of ending inventory and cost of goods sold under the (1) FIFO method

Answer 7

Chapter 6, Problem 6.7E

(a)

(1)

To determine

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.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To determine: The cost of ending inventory and cost of goods sold under the (1) FIFO method

Answer 8

(2)

To determine

The cost of ending inventory and cost of goods sold under LIFO method

Answer 9

(2)

To determine

The cost of ending inventory and cost of goods sold under LIFO method

Answer 10

(3)

To determine

The cost of ending inventory and cost of goods sold under average-cost method.

Answer 11

(3)

To determine

The cost of ending inventory and cost of goods sold under average-cost method.

Answer 12

(b)

To determine

The costing method which will report highest net income.

Answer 13

(b)

To determine

The costing method which will report highest net income.

Answer 14

(c)

To determine

The costing method which will report inventories close to current cost.

Answer 15

(c)

To determine

The costing method which will report inventories close to current cost.

Answer 16

(d)

To determine

The costing method which will result in least taxes in first year.

Answer 17

(d)

To determine

The costing method which will result in least taxes in first year.

Answer 18

Expert Solution & Answer

Answer 19

Expert Solution & Answer

Answer 20

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Answer 21

Ch. 6 - Prob. 1Q Ch. 6 - Prob. 2Q Ch. 6 - Prob. 3Q Ch. 6 - Prob. 4Q Ch. 6 - Prob. 5Q Ch. 6 - 6. Explain the difference between the terms FOB...Ch. 6 - Prob. 7Q Ch. 6 - Prob. 8Q Ch. 6 - 9. “The selection of an inventory cost flow method...Ch. 6 - Prob. 10Q

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The cost of ending inventory and cost of goods sold under LIFO method

The cost of ending inventory and cost of goods sold under average-cost method.

The costing method which will report highest net income.

The costing method which will report inventories close to current cost.

The costing method which will result in least taxes in first year.

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