Roman Sound uses a periodic inventory system. One of the stores products is a wireless head-phone. The
Question:
Instructions
a. Using periodic costing procedures, compute the cost of the December 31 inventory and the cost of goods sold for the year under each of the following cost assumptions:
1. First-in, first-out.
2. Last-in, first-out.
3. Average cost (round to the nearest dollar, except unit cost).
b. Which of the three inventory pricing methods provides the most realistic balance sheet valuation of inventory in light of the current replacement cost of these headphones? Does this same method also produce the most realistic measure of income in light of the costs being incurred by Roman Sound to replace these units when they are sold?Explain.
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello