PB7-1 Analyzing the Effects of Four Alternative Inventory Methods In a Periodic Inventory System [LO 7-...

  

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PB7-1 Analyzing the Effects of Four Alternative Inventory Methods In a Periodic Inventory System [LO 7- 3] Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January 31. The inventory's selling price is $8 per unit. Transactions Inventory, January 1 Sale, January 10 Purchase, January 12 Sale, January 17 Purchase, January 26 Unit Cost Units Total Cost $2.00 310 $620 (250) 2.50 360 (150) 3.50 80 a Weighted average cost b First-in, first-out Assume that for Specific identification method the January 10 sale was from the beginning inventory and the January 17 sale was from the January 12 purchase. Last-in, first-out d. Specific identification 900 Required: 1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at January 31 under each of the following inventory costing methods: (Round your Intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.) 280 Amount of Goods Ending Inventory Available for Sale Cost of Goods Sold 2-a. Of the four methods, which will result in the highest gross profit? Weighted average cost First-in, first-out Last-in, first-out Specific identification 2-b.Of the four methods, which will result in the lowest income taxes? Weighted average cost First-in, first-out O Last-in, first-out Specific identification PB7-1 Analyzing the Effects of Four Alternative Inventory Methods In a Periodic Inventory System [LO 7- 3] Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January 31. The inventory's selling price is $8 per unit. Transactions Inventory, January 1 Sale, January 10 Purchase, January 12 Sale, January 17 Purchase, January 26 Unit Cost Units Total Cost $2.00 310 $620 (250) 2.50 360 (150) 3.50 80 a Weighted average cost b First-in, first-out Assume that for Specific identification method the January 10 sale was from the beginning inventory and the January 17 sale was from the January 12 purchase. Last-in, first-out d. Specific identification 900 Required: 1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at January 31 under each of the following inventory costing methods: (Round your Intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.) 280 Amount of Goods Ending Inventory Available for Sale Cost of Goods Sold 2-a. Of the four methods, which will result in the highest gross profit? Weighted average cost First-in, first-out Last-in, first-out Specific identification 2-b.Of the four methods, which will result in the lowest income taxes? Weighted average cost First-in, first-out O Last-in, first-out Specific identification

Answer rating: 100% (QA)

ANSWER 1 A Weighted average cost The term weighted average cost in accounting refers to the method of determining expenses associated with a businesss ... View the full answer