LoBianco Company's record of transactions for the month of April was as follows. Purchases Sales April...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
LoBianco Company's record of transactions for the month of April was as follows. Purchases Sales April 1 (balance on hand) 600 @ S6.00 April 3 500 @ $10.00 4 1,500 @6.08 9 1,300 @ 10.00 800 @ 6.40 11 600 @ 11.00 13 1,200 @ 6.50 23 1,200 @ 11.00 21 700 @ 6.60 27 900 @ 12.00 29 500 @ 6.79 4,500 5.300 Instructions (Round unit price averages to four decimal places.) a. Assuming that periodic inventory records are kept, compute the inventory at April 30 using (1) FIFO and (2) average-cost. b. Assuming that perpetual inventory records are kept in both units and dollars, determine the inventory at April 30 using (1) FIFO and (2) average-cost. c. In an inflationary period, which inventory method-FIFO or average-cost-will show the highest net income? Purchases Sales Apr-01 (balance on hand) 600 6.00 Apr-01 500 10.00 Apr-04 1500 6.08 Apr-09 1300 e s 10.00 Apr-08 Apr-13 Аpr-11 Аpr-23 Apr-27 800 6.40 600 11.00 e s e s 1200 6.50 1200 11.00 Apr-21 Apr-29 700 6.60 900 12.00 500 6.79 5300 4500 Purchases 5300 Less:Sales -4500 Inventory 800 FIFO method: 300 x $ 6.60 $1,980.00 500 x $ 6.79 $3,395.00 800 $5,375.00 Average Method Average cost per unit = $6.35 as follows Units Cost per Total unit @ $ 6.00 = $ 3,600.00 @ $ 6.08 = $ 9,120.00 600 1500 800 6.40 = $ 5,120.00 1200 e $ 6.50 = $ 7,800.00 700 @ $ 6.60 = $ 4,620.00 500 @ $ 6.79 = $ 3,395.00 5300 $ 6.35 $3,655.00 Inventory 800 e $ 6.35 = $ 5,080.00 Under FIFO inventory is $5375.00 where as Average method it was $5080.00, hence closing stock under FIFO is high and hence income under FIFO method is high LoBianco Company's record of transactions for the month of April was as follows. Purchases Sales April 1 (balance on hand) 600 @ S6.00 April 3 500 @ $10.00 4 1,500 @6.08 9 1,300 @ 10.00 800 @ 6.40 11 600 @ 11.00 13 1,200 @ 6.50 23 1,200 @ 11.00 21 700 @ 6.60 27 900 @ 12.00 29 500 @ 6.79 4,500 5.300 Instructions (Round unit price averages to four decimal places.) a. Assuming that periodic inventory records are kept, compute the inventory at April 30 using (1) FIFO and (2) average-cost. b. Assuming that perpetual inventory records are kept in both units and dollars, determine the inventory at April 30 using (1) FIFO and (2) average-cost. c. In an inflationary period, which inventory method-FIFO or average-cost-will show the highest net income? Purchases Sales Apr-01 (balance on hand) 600 6.00 Apr-01 500 10.00 Apr-04 1500 6.08 Apr-09 1300 e s 10.00 Apr-08 Apr-13 Аpr-11 Аpr-23 Apr-27 800 6.40 600 11.00 e s e s 1200 6.50 1200 11.00 Apr-21 Apr-29 700 6.60 900 12.00 500 6.79 5300 4500 Purchases 5300 Less:Sales -4500 Inventory 800 FIFO method: 300 x $ 6.60 $1,980.00 500 x $ 6.79 $3,395.00 800 $5,375.00 Average Method Average cost per unit = $6.35 as follows Units Cost per Total unit @ $ 6.00 = $ 3,600.00 @ $ 6.08 = $ 9,120.00 600 1500 800 6.40 = $ 5,120.00 1200 e $ 6.50 = $ 7,800.00 700 @ $ 6.60 = $ 4,620.00 500 @ $ 6.79 = $ 3,395.00 5300 $ 6.35 $3,655.00 Inventory 800 e $ 6.35 = $ 5,080.00 Under FIFO inventory is $5375.00 where as Average method it was $5080.00, hence closing stock under FIFO is high and hence income under FIFO method is high
Expert Answer:
Answer rating: 100% (QA)
Required solution of all 3 parts is given below Part A FIFO Cost of goods sold FIFO Units Unit cost ... View the full answer
Related Book For
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
Posted Date:
Students also viewed these accounting questions
-
15. Which of the following are NOT angular movements? MARK TWO that apply. a. flexion b. gliding c. abduction d. circumduction e. supination Articulations a. Table (4 points) Specific joint Between...
-
Question 5 (1 point) Evaluate f(3,847) to 4 decimal places given that f(x) = log(x). Your Answer: Answer Question 6 (1 point) Evaluate f(38,141) to 4 decimal places given that f(x)= In(x). Your...
-
Which of the following activity bases would best be used to allocate setup activity to products? a. Number of inspections b. Direct labor hours c. Direct machine hours d. Number of production runs
-
The water in a shallow pond heats up during the day and cools down during the night. Heat transfer by radiation, conduction and convection with the ambient thus cycles the water temperature. Is such...
-
Use the financial statements for GameStop Corp. to calculate the following solvency ratios and profitability for the most recent fiscal year and provide an interpretation for each ratio: 1. Debt- to-...
-
Larry Riley formed a rental agreement for a self-storage unit with Iron Gate Self Storage in December 2003. The agreement stated that a maximum of \($5,000\) of personal property could be stored in...
-
The activities described by the following table are given for the Howard Corporation in Kansas: a) Draw the appropriate AON PERT diagram for J. C. Howards management team. b) Find the critical path....
-
what the values of NoSQL are from retail business perspective? Do you agree? Why?
-
On October 1, 20Y8, Jacinto Suarez and Tricia Fritz form a partnership. Suarez agrees to invest $25,000 in cash and inventory valued at $60,000. Fritz invests certain business assets at valuations...
-
A test was given to a group of students. The grades and gender are summarized below A B C Total 7 17 14 38 9 10 11 30 Total 16 27 25 68 Male Female If one student is chosen at random from those who...
-
What causes surface winds to be weaker than geostrophic winds? Explain.
-
Licking the backs of certain frogs produces visual and hallucinations, memory loss and cognitive dysfunction. What parts of the brain do you think that it affects? What receptors may be involved?
-
Elaborate extensively on the evolutionary trajectories of snakes, crocodiles, lizards, and turtles, elucidating the complex biological adaptations, genetic diversifications, and ecological contexts...
-
Coronado Industries had January 1 inventory of $300000 when it adopted dollar-value LIFO. During the year, purchases were $1830000 and sales were $3070000. December 31 inventory at year-end prices...
-
Arlington Inc.'s income statement showed Net Income of $57,600 and Depreciation Expense of $9,200. Accounts Receivable increased $3,750, Inventory increased $3,200, Supplies decreased $500, Accounts...
-
Describe a specific strategic incentive management method you would use for your Strategic Audit firm.? explain
-
Reconsider Prob. 1474. In order to drain the tank faster, a pump is installed near the tank exit as in Fig. P1475. Determine how much pump power input is necessary to establish an average water...
-
Boeing is one of the worlds major aerospace firms, with operations involving commercial aircraft, military aircraft, missiles, satellite systems, and information and battle management systems. As of...
-
Cardio Care Inc. manufactures stationary bicycles and rowing machines. The products are produced in the Fabrication and Assembly production departments. In addition to production activities, several...
-
What are the disadvantages of a partnership over a limited liability company form of organization for a profit-making business?
-
The study described in the preceding exercise also looked at 11,794 first-born daughters at the time they gave birth to their first child. A least squares regression was used to examine the...
-
Table 9.7 shows the SAT scores (6002400) and college GPAs (four-point scale) for 24 second-year college students at a highly selective college. Use a simple regression model to estimate the...
-
Two psychologists found a strong positive correlation between family tension and the number of hours spent watching television [15]. Give a logical explanation other than television shows increase...
Study smarter with the SolutionInn App