3M reports following for the month of April. Unit cost or Date Explanation Units selling price 1-Apr
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Question:
3M reports following for the month of April.
Unit cost or
Date Explanation Units
selling price
1-Apr Inventory 120 65
7-Apr Purchase 70 75
12-Apr Sale 60 130
22-Apr Purchase 70 85
25-Apr Sale 40 140
30-Apr Inventory 160
a) For each of the following assumptions, calculate (i) ending inventory, (ii) cost of goods sold & (iii) gross profit. [3*3]
1. FIFO
2. LIFO
3. Average cost
b) Which method gives higher net income? Why?
c) Which method results in the higher income taxes? Why?
Related Book For
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin
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