Daniel Company uses a periodic inventory system. Data for 2015: beginning mercha
ID: 2558340 • Letter: D
Question
Daniel Company uses a periodic inventory system. Data for 2015: beginning merchandise inventory (December 31, 2014), 2,000 units at $38; purchases, 7,970 units at $40; expenses (excluding income taxes), $193,100; ending inventory per physical count at December 31, 2015, 1,780; sales, 8,190 units; sales price per unit, $79; and average income tax rate, 34 percent
Compute cost of goods sold and prepare income statements under the FIFO, LIFO, and average cost inventory costing methods. (Do not round your intermediate calculations.)
Required:Explanation / Answer
Q1 Inventory Costing Method Cost of Goods Sold Units FIFO LIFO Average Cost Beginning inventory 2,000 $ 76,000 $ 76,000 $ 76,000 Purchases 7,970 $ 318,800 $ 318,800 $ 318,800 Goods available for sale 9,970 $ 394,800 $ 394,800 $ 394,800 Ending inventory 1,780 $ 71,200 $ 67,640 $ 70,486 Cost of goods sold 8,190 $ 323,600 $ 327,160 $ 324,314 Q2 FIFO LIFO Average Cost Sales (8190*79) $ 647,010 $ 647,010 $ 647,010 Cost of goods sold $ 323,600 $ 327,160 $ 324,314 Gross profit $ 323,410 $ 319,850 $ 322,696 Tax @34% on gross profit $ 109,959 $ 108,749 $ 109,717 Net Income $ 213,451 $ 211,101 $ 212,979
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