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. In Last-in-First-Out method, the cost of last purchased items are sold first. The value of the closing stock consists the initial purchased items. In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation: Weighted-average Cost = Total Cost of Goods Available For Sale Total Number of Units Available For Sale To Compute: The cost of ending inventory and cost of goods sold using FIFO.

Question

Anti-Pandemic Pharma Co. Ltd. reports the following information in its income statement: Sales = $5,250,000; Costs = $2,173,000; Other expenses = $187,400; Depreciation expense = $79,000; Interest expense= $53,555; Taxes = $76,000; Dividends = $69,000. $136,700 worth of new shares were also issued during the year and long-term debt worth $65,300 was redeemed. a) Compute the cash flow from assets b) Compute the net change in working capital

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.

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.

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

In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation:

Weighted-average Cost=Total Cost of Goods Available For SaleTotal Number of Units Available For Sale

To Compute: The cost of ending inventory and cost of goods sold using FIFO.

(2)

To determine

To Compute: The cost of ending inventory and cost of goods sold using, LIFO.

(3)

To determine

To Compute: The cost of ending inventory and cost of goods sold using Average-cost method.

(b)

To determine

The costing method which gives highest inventory, and highest cost of goods sold.

(c)

To determine

To Relate: The average-cost values for ending inventory, and cost of goods sold with ending inventory, and cost of goods for FIFO and LIFO.

(d)

To determine

To Explain: The reason for the average cost

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Anti-Pandemic Pharma Co. Ltd. reports the following information in its income statement: Sales = $5,250,000; Costs = $2,173,000; Other expenses = $187,400; Depreciation expense = $79,000; Interest expense= $53,555; Taxes = $76,000; Dividends = $69,000. $136,700 worth of new shares were also issued during the year and long-term debt worth $65,300 was redeemed. a) Compute the cash flow from assets b) Compute the net change in working capital

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Auditor should assess the likelihood of --------- when identifying potential criteria for the audit. material misstatement wrong answer

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.

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.

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

In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation:

Weighted-average Cost=Total Cost of Goods Available For SaleTotal Number of Units Available For Sale

To Compute: The cost of ending inventory and cost of goods sold using FIFO.

(2)

To determine

To Compute: The cost of ending inventory and cost of goods sold using, LIFO.

(3)

To determine

To Compute: The cost of ending inventory and cost of goods sold using Average-cost method.

(b)

To determine

The costing method which gives highest inventory, and highest cost of goods sold.

(c)

To determine

To Relate: The average-cost values for ending inventory, and cost of goods sold with ending inventory, and cost of goods for FIFO and LIFO.

(d)

To determine

To Explain: The reason for the average cost

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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.

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.

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

In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation:

Weighted-average Cost=Total Cost of Goods Available For SaleTotal Number of Units Available For Sale

To Compute: The cost of ending inventory and cost of goods sold using FIFO.

(2)

To determine

To Compute: The cost of ending inventory and cost of goods sold using, LIFO.

(3)

To determine

To Compute: The cost of ending inventory and cost of goods sold using Average-cost method.

(b)

To determine

The costing method which gives highest inventory, and highest cost of goods sold.

(c)

To determine

To Relate: The average-cost values for ending inventory, and cost of goods sold with ending inventory, and cost of goods for FIFO and LIFO.

(d)

To determine

To Explain: The reason for the average cost

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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.

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.

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

In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation:

Weighted-average Cost=Total Cost of Goods Available For SaleTotal Number of Units Available For Sale

To Compute: The cost of ending inventory and cost of goods sold using FIFO.

(2)

To determine

To Compute: The cost of ending inventory and cost of goods sold using, LIFO.

(3)

To determine

To Compute: The cost of ending inventory and cost of goods sold using Average-cost method.

(b)

To determine

The costing method which gives highest inventory, and highest cost of goods sold.

(c)

To determine

To Relate: The average-cost values for ending inventory, and cost of goods sold with ending inventory, and cost of goods for FIFO and LIFO.

(d)

To determine

To Explain: The reason for the average cost

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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.

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.

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

In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation:

Weighted-average Cost=Total Cost of Goods Available For SaleTotal Number of Units Available For Sale

To Compute: The cost of ending inventory and cost of goods sold using FIFO.

(2)

To determine

To Compute: The cost of ending inventory and cost of goods sold using, LIFO.

(3)

To determine

To Compute: The cost of ending inventory and cost of goods sold using Average-cost method.

(b)

To determine

The costing method which gives highest inventory, and highest cost of goods sold.

(c)

To determine

To Relate: The average-cost values for ending inventory, and cost of goods sold with ending inventory, and cost of goods for FIFO and LIFO.

(d)

To determine

To Explain: The reason for the average cost

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.

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.

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

In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation:

Weighted-average Cost=Total Cost of Goods Available For SaleTotal Number of Units Available For Sale

To Compute: The cost of ending inventory and cost of goods sold using FIFO.

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.

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.

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

In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation:

Weighted-average Cost=Total Cost of Goods Available For SaleTotal Number of Units Available For Sale

To Compute: The cost of ending inventory and cost of goods sold using FIFO.

Answer 8

(2)

To determine

To Compute: The cost of ending inventory and cost of goods sold using, LIFO.

Answer 9

(2)

To determine

To Compute: The cost of ending inventory and cost of goods sold using, LIFO.

Answer 10

(3)

To determine

To Compute: The cost of ending inventory and cost of goods sold using Average-cost method.

Answer 11

(3)

To determine

To Compute: The cost of ending inventory and cost of goods sold using Average-cost method.

Answer 12

(b)

To determine

The costing method which gives highest inventory, and highest cost of goods sold.

Answer 13

(b)

To determine

The costing method which gives highest inventory, and highest cost of goods sold.

Answer 14

(c)

To determine

To Relate: The average-cost values for ending inventory, and cost of goods sold with ending inventory, and cost of goods for FIFO and LIFO.

Answer 15

(c)

To determine

To Relate: The average-cost values for ending inventory, and cost of goods sold with ending inventory, and cost of goods for FIFO and LIFO.

Answer 16

(d)

To determine

To Explain: The reason for the average cost

Answer 17

(d)

To determine

To Explain: The reason for the average cost

Answer 18

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Answer 19

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Ch. 6 - The key to successful business operations is...Ch. 6 - Prob. 2Q Ch. 6 - What is just-in-time inventory management? What...Ch. 6 - Prob. 4Q Ch. 6 - Prob. 5Q Ch. 6 - Prob. 6Q Ch. 6 - Prob. 7Q Ch. 6 - Prob. 8Q Ch. 6 - What is the major advantage and major disadvantage...Ch. 6 - The selection of an inventory cost flow method is...

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To Compute: The cost of ending inventory and cost of goods sold using, LIFO.

To Compute: The cost of ending inventory and cost of goods sold using Average-cost method.

The costing method which gives highest inventory, and highest cost of goods sold.

To Relate: The average-cost values for ending inventory, and cost of goods sold with ending inventory, and cost of goods for FIFO and LIFO.

To Explain: The reason for the average cost

Chapter 6 Solutions