xLearning Personalized-Pract x th 2018SP ACC-110-099WB: 6Fc x moodle.bergen.edu/
ID: 2547324 • Letter: X
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xLearning Personalized-Pract x th 2018SP ACC-110-099WB: 6Fc x moodle.bergen.edu/mod/hsuforum/discuss.php?d 159051 Faculty SupportHep Christopher Castro Question: 1. 6 FORUM QA Questions. This is a multipart question. The accounting records of Ohm Electronics shows the following data 30 /06 13 To Units Cost Total Cost Beginning inventory.1/ 3,000 $1 $3,000 Purchase 9/20 Total units available for /20 To 8.000 | 11,000 1 $15.000 19.000 2/27 To AM 11 3/06 To sale Ending inventory, 12/31 1,600 Units solo 9,400 n't- EAK (M.. Tu, 3/20 To A. Determine cost of the units sold and cost of the units in ending inventory for LIFO, FIFO and average cost inventory methods B. What formula did you use for ending inventory for LIFO and FIFO? Why did it diffler from the LIFO and TER 5 CH 6 ION yPlus RJM Forum FIFO onginal formula? C. Which inventory method provides the higher net income? D. Which inventory method provides the highest ending inventory?Explanation / Answer
Answer = CALCULATION OF COST OF ENDING INVENTORY AND COST OF GOODS SOLD UNDER FIFO METHOD PURHASES COST OF GOODS SOLD CLOSING BALANCE Date Particulars Units (A) Rate Per unit Total Cost Units (A) Rate Per unit Total Cost Units (A) Rate Per unit Total Cost 1 Beginning inventory 1/1 3000 $1 $3,000 3000 $1 $3,000 2 Purchases 9/20 8000 2 $16,000 3000 $1 $3,000 8000 2 $16,000 3 Available For sale 11000 $19,000 Available For sale 11000 3000 $1 $3,000 Sales 9400 6400 2 $12,800 1600 2 $3,200 Closing Stock 12/31 1600 Total 9400 15800 1600 3200 Unit Amoun COGS as per FIFO Method 9400 $15,800.00 Closing Balance as per FIFO 1600 3200 CALCULATION OF COST OF ENDING INVENTORY AND COST OF GOODS SOLD UNDER LIFO METHOD PURHASES COST OF GOODS SOLD CLOSING BALANCE Date Particulars Units (A) Rate Per unit Total Cost Units (A) Rate Per unit Total Cost Units (A) Rate Per unit Total Cost 1 Beginning inventory 1/1 3000 $1 $3,000 3000 $1 $3,000 2 Purchases 9/20 8000 2 $16,000 3000 $1 $3,000 8000 2 $16,000 3 Available For sale 11000 $19,000 Available For sale 11000 8000 $2 $16,000 Sales 9400 1400 1 $1,400 1600 1 $1,600 Closing Stock 12/31 1600 Total 9400 17400 1600 1600 Unit Amoun COGS as per LIFO Method 9400 $17,400.00 Closing Balance as per LIFO 1600 1600 CALCULATION OF THE UNIT COST AS PER AVERAGE COST METHOD Units (A) Rate Per unit Total Cost Opening 3000 $ 1.00 $ 3,000.00 Purchase 2 = 8000 $ 2.00 $ 16,000.00 Total 11000 $ 19,000.00 Average Unit Cost = 19,000.00 "/" By $ 11,000.00 Average Unit Cost = $ 1.73 Per Units Cost of goods sold = $ 9,600.00 "X" By $ 1.73 Cost of goods sold = 16,581.82 Closing stock = 1,600.00 "X" By $ 1.73 Closing stock = $ 2,764 Answer = A) FIFO LIFO Average Cost cosT OF Goods Sold $15,800.00 $17,400.00 $ 16,582 Closing Stock $ 3,200 $ 1,600 $ 2,764 Answer =B) Differnce in the LIFO and FIFO is due valuation method in both system, In Lifo we take cost of Goods sold on the basis of last purchase and in FIFO methof we can take cost of Goods sold on the basis of first purchase Answer = C) FIFO method will carry more net income because it have low Cost of goods sold Answer =D) FIFO methof have the heighest inventory value
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