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Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory (ending inventory December 31, prior year), 2,120 units at $37; purchases, 7,840 units at $39; expenses (excluding income taxes), $193,500; ending inventory per physical count at December 31, current year, 1,780 units; sales, 8,180 units; sales price per unit, $78; and average income tax rate, 30 percent. Required: 1-a. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. 1-b. Prepare income statements under the FIFO, LIFO, and average cost inventory costing methods. 2. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow)? 3. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow), assuming that prices were falling? Complete this question by entering your answers in the tabs below. Req la Req 1b Req 2 Req 3 Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. Note: Do not round your intermediate calculations. Round your final answers to the nearest whole dollar amount. Inventory Costing Method Cost of Goods Sold Units FIFO LIFO Average Cost Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold < Req 1a Req 1b >

Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory (ending inventory December 31, prior year), 2,120 units at $37; purchases, 7,840 units at $39; expenses (excluding income taxes), $193,500; ending inventory per physical count at December 31, current year, 1,780 units; sales, 8,180 units; sales price per unit, $78; and average income tax rate, 30 percent. Required: 1-a. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. 1-b. Prepare income statements under the FIFO, LIFO, and average cost inventory costing methods. 2. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow)? 3. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow), assuming that prices were falling? Complete this question by entering your answers in the tabs below. Req la Req 1b Req 2 Req 3 Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. Note: Do not round your intermediate calculations. Round your final answers to the nearest whole dollar amount. Inventory Costing Method Cost of Goods Sold Units FIFO LIFO Average Cost Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold < Req 1a Req 1b >

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter13: Accounting For Merchandise Inventory
Section: Chapter Questions
Problem 1MP: Hurst Companys beginning inventory and purchases during the fiscal year ended December 31, 20-2,...
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Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory (ending inventory December 31, prior year), 2,120 units at $37; purchases, 7,840 units at $39; expenses (excluding income taxes), $193,500; ending inventory per physical count at December 31, current year, 1,780 units; sales, 8,180 units; sales price per unit, $78; and average income tax rate, 30 percent. Required: 1-a. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. 1-b. Prepare income statements under the FIFO, LIFO, and average cost inventory costing methods. 2. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow)? 3. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow), assuming that prices were falling? Complete this question by entering your answers in the tabs below. Req la Req 1b Req 2 Req 3 Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. Note: Do not round your intermediate calculations. Round your final answers to the nearest whole dollar amount. Inventory Costing Method Cost of Goods Sold Units FIFO LIFO Average Cost Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold < Req 1a Req 1b >
Transcribed Image Text:Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory (ending inventory December 31, prior year), 2,120 units at $37; purchases, 7,840 units at $39; expenses (excluding income taxes), $193,500; ending inventory per physical count at December 31, current year, 1,780 units; sales, 8,180 units; sales price per unit, $78; and average income tax rate, 30 percent. Required: 1-a. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. 1-b. Prepare income statements under the FIFO, LIFO, and average cost inventory costing methods. 2. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow)? 3. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow), assuming that prices were falling? Complete this question by entering your answers in the tabs below. Req la Req 1b Req 2 Req 3 Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. Note: Do not round your intermediate calculations. Round your final answers to the nearest whole dollar amount. Inventory Costing Method Cost of Goods Sold Units FIFO LIFO Average Cost Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold < Req 1a Req 1b >
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