Comet Appliances and Supply began December with 280 units of inventory that cost $90 each. During December,
Question:
Comet Appliances and Supply began December with 280 units of inventory that cost $90 each. During December, the store made the following purchases:
Dec. 3 ..............430 units at $91
12 ...................190 units at $92
18 ..................420 units at $93
27 ....................426 units at $92
The store uses the periodic inventory system, and the physical count at December 31 indicates that 358 units of inventory are on hand.
Required
1. Determine the ending inventory and cost of goods sold amounts for the December financial statements under the weighted-average-cost and FIFO methods. Round the average cost per unit to the nearest cent and all other amounts to the nearest dollar.
2. Sales revenue for December totaled $192,000. Compute Comet Appliances and Supply's gross margin for December under each method.
3. Which method will result in lower income taxes for Comet? Why? Which method will result in higher net income for Comet? Why?
Ending InventoryThe ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Horngrens Accounting
ISBN: 978-0133855371
10th Canadian edition Volume 1
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo Ann L. Johnston, Peter R. Norwood