Marlow Company, Ltd. had a beginning inventory of 400 units of Product Kimbo at a cost of
Question:
at a cost of £8 per unit. During the year, purchases were:
Feb. 20.................200 units at £9..............Aug. 12.............600 units at £11
May 5.................500 units at £10...............Dec. 8.............300 units at £12
Marlow Company uses a periodic inventory system. Sales totaled 1,500 units.
Instructions
(a) Determine the cost of goods available for sale.
(b) Determine (1) the ending inventory and (2) the cost of goods sold under the two assumed cost flow methods (FIFO and average-cost). Prove the accuracy of the cost of goods sold under the FIFO and average-cost methods.
(c) Which cost flow method results in (1) the lower ending inventory amount for the statement of financial position, and (2) the lower cost of goods sold for the income statement?
Ending Inventory
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 =...
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Related Book For
Financial Accounting
ISBN: 978-1118978085
IFRS 3rd edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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