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Simple Plan Enterprises uses a periodic inventory system. Its records showed the following: Inventory, December 31, using FIFO 44 Units @ $17 $748 Inventory, December 31, using LIFO 44 Units @ $13 = $572 Transactions in the Following Year Purchase, January 9 Purchase, January 20 Sale, January 11 (at $41 per unit) Sale, January 27 (at $42 per unit) Units Unit Cost Total Cost 56 $ 1,008 2,014 18 106 19 86 62 Required: 1. Compute the number and cost of goods available for sale, the cost of ending inventory, and the cost of goods sold under FIFO and LIFO 2. Compute the inventory turnover ratio under the FIFO and LIFO inventory costing methods. 3. Does the inventory method used make a significant difference in the inventory turnover ratio?

Simple Plan Enterprises uses a periodic inventory system. Its records showed the following: Inventory, December 31, using FIFO 44 Units @ $17 $748 Inventory, December 31, using LIFO 44 Units @ $13 = $572 Transactions in the Following Year Purchase, January 9 Purchase, January 20 Sale, January 11 (at $41 per unit) Sale, January 27 (at $42 per unit) Units Unit Cost Total Cost 56 $ 1,008 2,014 18 106 19 86 62 Required: 1. Compute the number and cost of goods available for sale, the cost of ending inventory, and the cost of goods sold under FIFO and LIFO 2. Compute the inventory turnover ratio under the FIFO and LIFO inventory costing methods. 3. Does the inventory method used make a significant difference in the inventory turnover ratio?

Intermediate Accounting: Reporting And Analysis
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 11RE: Jessie Stores uses the periodic system of calculating inventory. The following information is...
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Simple Plan Enterprises uses a periodic inventory system. Its records showed the following: Inventory, December 31, using FIFO Inventory, December 31, using LIFO - 44 Units @ $17 = $748 44 Units @ $13 = $572 Transactions in the Following Year Purchase, January 9 Purchase, January 20 Sale, January 11 (at $41 per unit) Sale, January 27 (at $42 per unit) Units Unit Cost Total Cost 56 18 $ 1,008 106 19 2,014 86 62 Required: 1. Compute the number and cost of goods available for sale, the cost of ending inventory, and the cost of goods sold under FIFO and LIFO. 2. Compute the inventory turnover ratio under the FIFO and LIFO inventory costing methods. 3. Does the inventory method used make a significant difference in the inventory turnover ratio?
Transcribed Image Text:Simple Plan Enterprises uses a periodic inventory system. Its records showed the following: Inventory, December 31, using FIFO Inventory, December 31, using LIFO - 44 Units @ $17 = $748 44 Units @ $13 = $572 Transactions in the Following Year Purchase, January 9 Purchase, January 20 Sale, January 11 (at $41 per unit) Sale, January 27 (at $42 per unit) Units Unit Cost Total Cost 56 18 $ 1,008 106 19 2,014 86 62 Required: 1. Compute the number and cost of goods available for sale, the cost of ending inventory, and the cost of goods sold under FIFO and LIFO. 2. Compute the inventory turnover ratio under the FIFO and LIFO inventory costing methods. 3. Does the inventory method used make a significant difference in the inventory turnover ratio?
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