The cost of Coke was increasing in the month of December 20X1. Based onyour computation in (b) and (c) above, identify and explain how this wouldimpact the ending inventory valuation and cost of goods sold under each of thedifferent cost flow assumptions: (i) FIFO method, (ii) weighted average methodand (iii) LIFO method, relative to the others. In other words, which cost flowassumption will result in the highest ending inventory valuation on the balancesheet and the lowest cost of goods sold on the income statement? DateDec 1Dec 7Dec 15Dec 20Dec 25EventBeginning InventoryPurchased in cashSoldPurchased in cashSoldUnitsmillions)1,500400(1,355)1,200(865)(in Unit Cost@$0.50 each@$0.53 each@$0.55 eachA stock take conducted on the night of 31 December 20X1 indicated that there are 880million cans of Coke left in the stock. Suppose the company uses a periodic inventorysystem and uses FRS 2 Inventories when accounting for its inventories. The companyalso uses the "allowance method" for allowance for accounts receivables impairmentunder FRS 109 Financial Instruments.

The inventory valuation methods value the inventory on different basis like FIFO, LIFO and weighted…

he cost of Coke was increasing in the month of December 20X1. Based on your computation in (b) and (c) above, identify and explain how this would impact the ending inventory valuation and cost of goods sold under each of the different cost flow assumptions: (i) FIFO method, (ii) weighted average method and (iii) LIFO method, relative to the others. In other words, which cost flow assumption will result in the highest ending inventory valuation on the balance sheet and the lowest cost of goods sold on the income statement?

he cost of Coke was increasing in the month of December 20X1. Based on your computation in (b) and (c) above, identify and explain how this would impact the ending inventory valuation and cost of goods sold under each of the different cost flow assumptions: (i) FIFO method, (ii) weighted average method and (iii) LIFO method, relative to the others. In other words, which cost flow assumption will result in the highest ending inventory valuation on the balance sheet and the lowest cost of goods sold on the income statement?

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.4.7P

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