Information for Danielle Company is presented in P6-3B. Assume the same inventory data and that the company
Question:
Information for Danielle Company is presented in P6-3B. Assume the same inventory data and that the company uses a perpetual inventory system. Ignore the inventory difference from P6-3B (c).
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Instructions
(a) Calculate the cost of goods sold and the ending inventory at June 30 using FIFO.
(b) Prepare the journal entries to record the June 25 sale and June 26 sales return.
(c) If the company changes from FIFO to average and prices continue to rise, would you expect the cost of goods sold and ending inventory amounts to be higher or lower than these amounts?
TAKING IT FURTHER
If Danielle Company wishes to change from FIFO to the average cost formula, what factors must it consider before making this change?
The 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 =...
Step by Step Answer:
a Date Purchases Cost of Goods Sold Balance Units Cost Total Units Cost Total Units Cost Total June ...View the full answer
Accounting Principles Part 1
ISBN: 978-1118306789
6th Canadian edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow
