Applying and Analyzing Inventory Costing MethodsAt the beginning of the current period, Chen carried 1,000 units of its product with a unit cost of $15. A summary of purchases during the current period follows. During the period, Chen sold 2,800 units.Units Unit Cost Cost$15 $15,00014 25,20016 12,80019 22,800Beginning Inventory 1,000Purchase #11,800Purchase #2800Purchase #31,200(a) Assume that Chen uses the first-in, first-out method. Compute both cost of good sold for the current period and the ending inventory balance. Use the financial statement effects template to record cost of goods sold for the period.Ending inventory balance $Cost of goods soldUse negative signs with answers, when appropriate.$TransactionRecord FIFO cost of goods soldCash Asset +$NoncashAssetsBalance SheetContributed EarnedLiabilities + Capital + CapitalIncome StatementRevenue - Expenses =(b) Assume that Chen uses the last-in, first-out method. Compute both cost of good sold for the current period and the ending inventory balance.Ending inventory balance $Cost of goods sold(d) Which of these three inventory costing methods would you choose to:1. Reflect what is probably the physical flow of goods? OLIFOOFIFO OAverage Cost2. Minimize income taxes for the period?OLIFO OFIFO OAverage Cost3. Report the largest amount of income for the period? OLIFO OFIFO OAverage CostNetIncome(c) Assume that Chen uses the average cost method. Compute both cost of good sold for the current period and the ending inventory balance. (Hint: Round average cost per unit two decimal places prior to calculating the Ending inventory balance. Calculate the Cost of Goods Sold (CGS) as: (CGS = Cost of goodsavailable for sale - Ending inventory balance.)Ending inventory balance $Cost of goods sold $

Name: Applying and Analyzing Inventory Costing MethodsAt the beginning of t
Uploaded: 2024-03-20T06:32:37.000Z
Channel: Bartleby
Description: Applying and Analyzing Inventory Costing MethodsAt the beginning of the current period, Chen carried 1,000 units of its product with a unit cost of $15. A summary of purchases during the current period follows. During the period, Chen sold 2,800 uni