Bulldog Appliances uses the periodic inventory system. Details regarding the inv
ID: 2363707 • Letter: B
Question
Bulldog Appliances uses the periodic inventory system. Details regarding the inventory of appliances at August 1, 2009, purchases invoices during the year, and the inventory count at July 31, 2010, are summarized as follows:
1. Determine the cost of the inventory on July 31, 2010, by the first-in, first-out method.
If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase.
2. Determine the cost of the inventory on July 31, 2010, by the last-in, first-out method.
If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase.
3. Determine the cost of the inventory on July 31, 2010, by the average cost method.
If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase.
4. Discuss which method (FIFO or LIFO) would be preferred for income tax purposes in periods of (a) rising prices and (b) declining prices.
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
First-In, First-Out Method Model Quantity Unit Cost Total Cost ALN3 $ $ ALN3 UGA1 UGA1 SL89 F69 H60W H60W J600T J600T ZZH0 ZZH0 Total $
2. Determine the cost of the inventory on July 31, 2010, by the last-in, first-out method.
If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase.
3. Determine the cost of the inventory on July 31, 2010, by the average cost method.
If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase.
4. Discuss which method (FIFO or LIFO) would be preferred for income tax purposes in periods of (a) rising prices and (b) declining prices.
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
Explanation / Answer
(90 x 102) + (60 x 101) + (45 x 101) + (35 x 95) = 230 units for a total of $23,110 available for sale. There are 88 units remaining in ending inventory. a. average cost method 23,110 / 230 = $100.48 per unit 100.48 x 88 = $8,842.24 Ending Inventory b. first in first out method The most recent purchases remain in ending inventory (35 x 95) + (53 x 101) = $8,678 Ending Inventory c. last in first out method The earliest purchases remain in ending inventory. 88 x 102 = $8,976
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