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The Ryan Corporation uses the periodic inventory method. The following data were available for the year ended October 31, 2021. Transaction Quantity Price Qty*Price Inventory October 31, 2020 6000 48000 March Purchase 1500 13500 May Purchase 1800 10 18000 June Purchase 800 11 8800 July Sales 6000 | 90000 15 Required (To prevent difficulties with rounding, please calculate the unit cost of ending inventory to two decimal places ): 1. Assuming the company uses FIFO, compute gross margin for the Ryan Company in the 2021 fiscal year. 2. Assuming the company uses LIFO, compute gross margin for the Ryan Company in the 2021 fiscal year. 3. Assuming the company uses the Weighted Average method, compute gross margin for the Ryan Company in the 2021 fiscal year.

The Ryan Corporation uses the periodic inventory method. The following data were available for the year ended October 31, 2021. Transaction Quantity Price Qty*Price Inventory October 31, 2020 6000 48000 March Purchase 1500 13500 May Purchase 1800 10 18000 June Purchase 800 11 8800 July Sales 6000 | 90000 15 Required (To prevent difficulties with rounding, please calculate the unit cost of ending inventory to two decimal places ): 1. Assuming the company uses FIFO, compute gross margin for the Ryan Company in the 2021 fiscal year. 2. Assuming the company uses LIFO, compute gross margin for the Ryan Company in the 2021 fiscal year. 3. Assuming the company uses the Weighted Average method, compute gross margin for the Ryan Company in the 2021 fiscal year.

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
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 4E: Inventory Write-Down The following information for Tuell Company is available: Required: 1. Assume...
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Problem 7-4: The Ryan Corporation The Ryan Corporation uses the periodic inventory method. The following data were available for the year ended October 31, 2021. Transaction Quantity Price Qty"Price Inventory October 31, 2020 6000 8. 48000 March Purchase 1500 9 13500 May Purchase 1800 10 18000 June Purchase 800 11 8800 July Sales 6000 15 90000 Required (To prevent difficulties with rounding, please calculate the unit cost of ending inventory to two decimal places ): 1. Assuming the company uses FIFO, compute gross margin for the Ryan Company in the 2021 fiscal year. 2. Assuming the company uses LIFO, compute gross margin for the Ryan Company in the 2021 fiscal year. 3. Assuming the company uses the Weighted Average method, compute gross margin for the Ryan Company in the 2021 fiscal year. 4. If income taxes are 30% and the authorities permit firms to choose a stock flow assumption, what are the potential savings from using LIFO vs FIFO? Why? 5. Compute the LIFO Reserve Upon completion, enter the following data here: FIFO Gross Margin: LIFO Gross Margin: Gross Margin - Weighted Average Method: Savings from using LIFO: The LIFO reserve:
Transcribed Image Text:Problem 7-4: The Ryan Corporation The Ryan Corporation uses the periodic inventory method. The following data were available for the year ended October 31, 2021. Transaction Quantity Price Qty"Price Inventory October 31, 2020 6000 8. 48000 March Purchase 1500 9 13500 May Purchase 1800 10 18000 June Purchase 800 11 8800 July Sales 6000 15 90000 Required (To prevent difficulties with rounding, please calculate the unit cost of ending inventory to two decimal places ): 1. Assuming the company uses FIFO, compute gross margin for the Ryan Company in the 2021 fiscal year. 2. Assuming the company uses LIFO, compute gross margin for the Ryan Company in the 2021 fiscal year. 3. Assuming the company uses the Weighted Average method, compute gross margin for the Ryan Company in the 2021 fiscal year. 4. If income taxes are 30% and the authorities permit firms to choose a stock flow assumption, what are the potential savings from using LIFO vs FIFO? Why? 5. Compute the LIFO Reserve Upon completion, enter the following data here: FIFO Gross Margin: LIFO Gross Margin: Gross Margin - Weighted Average Method: Savings from using LIFO: The LIFO reserve:
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