The following information applies to he questions displayed below Beck Inc. uses

Question

The following information applies to he questions displayed below Beck Inc. uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2 Unit Cos Invento y, December 31, prior year For the current year 7900 S11 Purchasc. March 5 Purchase, September 19 Sale ($27 each) Sale $29 each Operating expenses (excluding income tax expense) 19,900 10.900 8,900 16.900 $40000 velue 1.00 points Required information Required: 1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO. (Loss amounts should be indicated with a minus sign.) BECK INC. Income Statement For the Year Ended December 31, current year Case A Case B FIFO LIFO Cost of gcods sold:

Explanation / 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 Opening Stock 7900 11 86900 Purchases March 5 19900 $9 $1,79,100 7900 11 86900 19900 $9 $1,79,100 Purchases September 19 10900 $5 $54,500 7900 11 86900 19900 $9 $1,79,100 10900 $5 $54,500 Sales ($ 27 Each) 7900 $11 $86,900 1000 $9 $9,000 18900 $9 $1,70,100 10900 $5 $54,500 Sales ($ 29 Each) 16900 $9 $1,52,100 2000 $9 $18,000 10900 $5 $54,500 Total 25800 248000 12900 $72,500 Unit Amount COGS as per FIFO Method            25,800.00 $2,48,000.00 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 Opening Stock 7900 11 86900 Purchases March 5 19900 $9 $1,79,100 7900 11 86900 19900 $9 $1,79,100 Purchases September 19 10900 $5 $54,500 7900 11 86900 19900 $9 $1,79,100 10900 $5 $54,500 Sales ($ 27 Each) 8900 $5 $44,500 7900 11 86900 19900 $9 $1,79,100 2000 $5 $10,000 Sales ($ 29 Each) 2000 $5 $10,000 14900 $9 $1,34,100 7900 $11 $86,900 5000 $9 $45,000 Total 25800 188600 12900 131900 Unit Amount COGS as per FIFO Method            25,800.00 $1,88,600.00 Answer = 1) BECK INC, Case A Case B FIFO LIFO Sales 8900 Units X $ 27 = $2,40,300 $2,40,300 16900 Units X $ 29 = $4,90,100 $4,90,100 Total $7,30,400 $7,30,400 Less: COGS = $2,48,000 $1,88,600 Gross Revenue $4,82,400 $5,41,800 LEsS: Operating Expensese $4,09,000 $4,09,000 Net revenue $73,400 $1,32,800 Answer = 2) COMPARISON OF AMOUNTS Case A Case B FIFO LIFO Difference Pretax income $73,400 $1,32,800 -$59,400 Ending invetory $72,500 $1,31,900 -$59,400 Answer = 3 We can use the FIFO method for calculation because the net income is less in this option Answer = FIFO

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.