Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Inventory Costing Methods Periodic Method Chen Sales Corporation uses the periodic invento...

Inventory Costing Methods Periodic Method Chen Sales Corporation uses the periodic inventory system On January 1 2015 Chen had 1000 units of product A with a unit cost of $20 per unit A summary

Inventory Costing Methods—Periodic Method Chen Sales Corporation uses the periodic inventory system. On January 1, 2015, Chen had 1,000 units of product A with a unit cost of $20 per unit. A summary of purchases and sales during 2015 follows:

  Unit
Cost
Units
Purchased
Units
Sold
Feb.2     400
Apr.6 $22 1,800  
July 10     1,600
Aug.9 25 800  
Oct.23     800
Dec.30 29 1,400  


Required

Assume that Chen uses the first-in, first-out method. Compute the cost of goods sold for 2015 and the ending inventory balance at December 31, 2015, for product A.

Assume that Chen uses the last-in, first-out method. Compute the cost of goods sold for 2015 and the ending inventory balance at December 31, 2015, for product A.

Assume that Chen uses the weighted-average cost method. Compute the cost of goods sold for 2015 and the ending inventory balance at December 31, 2015, for product A.

Do not round until your final answers. Round your answers to the nearest dollar.

a. First-in, First-out:  
  Ending Inventory $Answer
     
  Cost of Goods Sold $Answer
     
b. Last-in, first-out:  
  Ending Inventory $Answer
     
  Cost of Goods Sold $Answer
     
c. Weighted Average  
  Ending Inventory $Answer
  Cost of goods sold $Answer

d. Assuming that Chen’s products are perishable items, which of the three inventory costing methods would you choose to:
Assume this is during a period of rising costs.

1. Reflect the likely goods flow through the business? AnswerFirst-in, first outLast-in, first outWeighted-average cost
2. Minimize income taxes for the period? AnswerFirst-in, first outLast-in, first outWeighted-average cost
3. Report the largest amount of net income for the period? AnswerFirst-in, first outLast-in, first outWeighted-average cost
 

V

Apr 03 2020 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions