During January, a company that uses a perpetual inventory system had beginning i

Question

During January, a company that uses a perpetual inventory system had beginning inventory, purchases, and sales as follows:
   Units Unit cost

Beggining inventory               100       10

Jan 5 purchased                              40           12

Jan 10 sold                                       60

Jan 15 purchased                            70           13

Jan 25 sold                                       50

** The selling price per unit is $20.

1. Using the perpetual inventory system, calculate the total cost of goods sold for January and cost of the company's January 31st inventory for the following methods. Show all your work using the format used in the text!

a)     FIFO

b)     LIFO

c)     Weighted average

d)     Prepare journal entries for the events listed in the question using the amounts calculated using in (a) FIFO method.

2. Using the periodic inventory system, calculate the cost of goods sold for January and cost of the company's January 31st inventory for the following methods.  Show all your work using the format provided in the appendix of the chapter in the text!

a)     FIFO

b)     LIFO

c)     Weighted average

3. A company made the following purchases during the year:

Jan 10: 15 units @ 360 each

Mar 25: 25 units @390 each

April 25: 10 units @ 420 each

July 30: 20 units @ 450 each

Oct 10: 15 units @ 480 each

On December 31, there were 28 units in ending inventory. These 28 units consisted of 1 from the January 10 purchase, 2 from the March 15 purchase, 5 from the April 25 purchase, 15 from the July 30 purchase, and 5 from the October 10 purchase. Using perpetual inventory system, calculate the cost goods sold and ending inventory for the year using the specific identification method. Show all your work using the format provided in the text! (Note: Answers do not differ using the periodic inventory system)

4. Monitor Company uses the LIFO method for valuing its ending inventory. The following financial statement information is available for its first year of operation:

Income Statement

For the year ended Dec 31

Sales                                  50,0000

Cost of goods sold             23,000

Gross profit                        27,000

Expenses                           13,000

Income before taxes           14,000

Monitor's ending inventory using the LIFO method was $8,200. Monitor's accountant determined that, had the company used FIFO, the ending inventory would have been $8,500.

a)    Determine what the income before taxes would have been, had Monitor used the FIFO method of inventory valuation instead of LIFO.

b)    What would be the difference in income taxes between LIFO and FIFO, assuming a 30% tax rate?

c)    If Monitor wanted to lower the amount of income taxes to be paid, which method would it choose?

Explanation / Answer

THERE IS 4 PARTS TO THIS QUESTION AND ALL OF THESE ANWERS FUCKING SUCK

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