Perpetual Inventory System: Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time. 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. The ending inventory under a perpetual inventory system using FIFO.

Question

Want to see the full answer?

Answer 1

Question

Chapter 6, Problem 6.9AP

(a) (1)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

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.

The ending inventory under a perpetual inventory system using FIFO.

(2)

To determine

The ending inventory under a perpetual inventory system using moving-average cost.

(3)

To determine

The ending inventory under a perpetual inventory system using LIFO.

(b)

To determine

To identify: The costing method which produces the highest ending inventory valuation.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Need help with this general accounting question

Classify the following items as assets, liabilities or owner's equity -account payable -loan from bank -owners interest in the business -bank overdraft -furniture -account receivable -cash at bank -loan secured by mortgage -motor vehicle -inventories -land -goodwill -drawing

need this help me financial accounting

Answer 2

Question

Chapter 6, Problem 6.9AP

(a) (1)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

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.

The ending inventory under a perpetual inventory system using FIFO.

(2)

To determine

The ending inventory under a perpetual inventory system using moving-average cost.

(3)

To determine

The ending inventory under a perpetual inventory system using LIFO.

(b)

To determine

To identify: The costing method which produces the highest ending inventory valuation.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 6, Problem 6.9AP

(a) (1)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

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.

The ending inventory under a perpetual inventory system using FIFO.

(2)

To determine

The ending inventory under a perpetual inventory system using moving-average cost.

(3)

To determine

The ending inventory under a perpetual inventory system using LIFO.

(b)

To determine

To identify: The costing method which produces the highest ending inventory valuation.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 6, Problem 6.9AP

(a) (1)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

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.

The ending inventory under a perpetual inventory system using FIFO.

(2)

To determine

The ending inventory under a perpetual inventory system using moving-average cost.

(3)

To determine

The ending inventory under a perpetual inventory system using LIFO.

(b)

To determine

To identify: The costing method which produces the highest ending inventory valuation.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 6, Problem 6.9AP

(a) (1)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

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.

The ending inventory under a perpetual inventory system using FIFO.

(2)

To determine

The ending inventory under a perpetual inventory system using moving-average cost.

(3)

To determine

The ending inventory under a perpetual inventory system using LIFO.

(b)

To determine

To identify: The costing method which produces the highest ending inventory valuation.

Answer 6

Chapter 6, Problem 6.9AP

(a) (1)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

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.

The ending inventory under a perpetual inventory system using FIFO.

Answer 7

Chapter 6, Problem 6.9AP

(a) (1)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

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.

The ending inventory under a perpetual inventory system using FIFO.

Answer 8

(2)

To determine

The ending inventory under a perpetual inventory system using moving-average cost.

Answer 9

(2)

To determine

The ending inventory under a perpetual inventory system using moving-average cost.

Answer 10

(3)

To determine

The ending inventory under a perpetual inventory system using LIFO.

Answer 11

(3)

To determine

The ending inventory under a perpetual inventory system using LIFO.

Answer 12

(b)

To determine

To identify: The costing method which produces the highest ending inventory valuation.

Answer 13

(b)

To determine

To identify: The costing method which produces the highest ending inventory valuation.

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 17

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

The ending inventory under a perpetual inventory system using moving-average cost.

The ending inventory under a perpetual inventory system using LIFO.

To identify: The costing method which produces the highest ending inventory valuation.

Want to see the full answer?

Chapter 6 Solutions