Lopez Company reported the following current-year data for its only product. The company uses a periodic inventory system, and its ending inventory consists of 510 units—170 from each of the last three purchases. January 1 Beginning inventory 270 units @ $4.80 = $ 1,296 March 7 Purchase 580 units @ $5.75 = 3,335 July 28 Purchase 1,220 units @ $5.30 = 6,466 October 3 Purchase 1,100 units @ $5.60 = 6,160 December 19 Purchase 600 units @ $5.80 = 3,480 Totals 3,770 units $ 20,737 (a-d) Determine the cost assigned to ending inventory and to cost of goods sold for the following. (e) Which method yields the highest net income?
Lopez Company reported the following current-year data for its only product. The company uses a periodic inventory system, and its ending inventory consists of 510 units—170 from each of the last three purchases. January 1 Beginning inventory 270 units @ $4.80 = $ 1,296 March 7 Purchase 580 units @ $5.75 = 3,335 July 28 Purchase 1,220 units @ $5.30 = 6,466 October 3 Purchase 1,100 units @ $5.60 = 6,160 December 19 Purchase 600 units @ $5.80 = 3,480 Totals 3,770 units $ 20,737 (a-d) Determine the cost assigned to ending inventory and to cost of goods sold for the following. (e) Which method yields the highest net income?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter7: Inventories: Cost Measurement And Flow Assumptions
Section: Chapter Questions
Problem 3RE: Reid Company uses the periodic inventory system. On January 1, it had an inventory balance of...
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Lopez Company reported the following current-year data for its only product. The company uses a periodic inventory system, and its ending inventory consists of 510 units—170 from each of the last three purchases.
| January 1 | Beginning inventory | 270 | units | @ $4.80 | = | $ 1,296 |
|---|---|---|---|---|---|---|
| March 7 | Purchase | 580 | units | @ $5.75 | = | 3,335 |
| July 28 | Purchase | 1,220 | units | @ $5.30 | = | 6,466 |
| October 3 | Purchase | 1,100 | units | @ $5.60 | = | 6,160 |
| December 19 | Purchase | 600 | units | @ $5.80 | = | 3,480 |
| Totals | 3,770 | units | $ 20,737 |
(a-d) Determine the cost assigned to ending inventory and to cost of goods sold for the following.
(e) Which method yields the highest net income?
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