Comparison of Inventory Costing Methods-Periodic System Bitten Company's inventory records show 603 units on hand on October 1 with a unit cost of $5 each. The following transactions occurred during the month of October: Date October 4 October 8 October 9 Unit Purchases 791 @ $5.41 FIFO LIFO Unit Sales 694 $5.89 507 @ $10.00 October 18 October 20 October 29 796 @ $5.86 All expenses other than cost of goods sold amount to $3,050 for the month. The company uses an estimated tax rate of 30% to accrue monthly income taxes. Required: 696 @ $10.00 797 @ $11.00 1. Prepare a chart comparing cost of goods sold and ending inventory using the periodic system and the following costing methods. In your calculations round weighted average unit cost to three decimal places and round all other calculations and your final answers to the nearest dollar. Bitten Company Comparison for Cost of Goods Sold and Ending Inventory Using the Periodic System For Weighted Average, FIFO and LIFO Cost Methods Inventory System Cost of Goods Sold Ending Inventory Total Weighted average $ X
Comparison of Inventory Costing Methods-Periodic System Bitten Company's inventory records show 603 units on hand on October 1 with a unit cost of $5 each. The following transactions occurred during the month of October: Date October 4 October 8 October 9 Unit Purchases 791 @ $5.41 FIFO LIFO Unit Sales 694 $5.89 507 @ $10.00 October 18 October 20 October 29 796 @ $5.86 All expenses other than cost of goods sold amount to $3,050 for the month. The company uses an estimated tax rate of 30% to accrue monthly income taxes. Required: 696 @ $10.00 797 @ $11.00 1. Prepare a chart comparing cost of goods sold and ending inventory using the periodic system and the following costing methods. In your calculations round weighted average unit cost to three decimal places and round all other calculations and your final answers to the nearest dollar. Bitten Company Comparison for Cost of Goods Sold and Ending Inventory Using the Periodic System For Weighted Average, FIFO and LIFO Cost Methods Inventory System Cost of Goods Sold Ending Inventory Total Weighted average $ X
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter5: Inventories And Cost Of Goods Sold
Section: Chapter Questions
Problem 5.10MCP: Comparison of Inventory Costing Methods—Periodic System Bitten Companys inventory records show 600...
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I don't know if my question went through, but I was wondering if you could help me solve this? maybe write out how to do it?
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Explanation -
Inventory Valuation Methods are methods of valuation of inventory.
There are three methods of inventory valuation - FIFO, LIFO, and Weighted Average.
1. FIFO Method -
Under FIFO Method, Inventory purchased first is sold first.
2. LIFO Method -
Under LIFO Method, Inventory purchased last is sold first.
3. Weighted Average -
Under the Weighted Average Method, the cost is considered to be average at the time of sale.
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