FINANCIAL ACCOUNTING
9th Edition
ISBN: 9781119620631
Author: Kimmel
Publisher: WILEY
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Chapter 6, Problem 6.6AP
(a) (1)
To determine
Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.
In First-in-First-Out method, the cost of initial purchased items are sold first. The value of the ending inventory consists the recent purchased items.
To Determine: The selection of diamonds for selling that should follow by J Gems to maximize the gross profit.
(2)
To determine
The selection of diamonds for selling that should follow by J Gems to minimize the gross profit.
(b)
To determine
To Calculate: The cost of goods sold and gross profit under FIFO method.
(c)
To determine
To Calculate: The cost of goods sold and gross profit under LIFO method.
(d)
To determine
To Explain: The cost flow method that should use by J Gems.
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You have the following information for Blossom Company. Blossom Company uses the periodic method of accounting for its inventory
transactions. Blossom Company only carries one brand and size of diamonds-all are identical. Each batch of diamonds purchased is
carefully coded and marked with its purchase cost.
March 1
Beginning inventory 146 diamonds at a cost of $317 per diamond.
March 3
Purchased 189 diamonds at a cost of $340 each.
March 5
Sold 179 diamonds for $614 each.
March 10
Purchased 324 diamonds at a cost of $399 each.
March 25
Sold 408 diamonds for $681 each.
(a)
Your answer is partially correct.
Assume that Blossom Company uses the specific identification cost flow method.
(1)
Demonstrate how Blossom Company could maximize its gross profit for the month by specifically selecting which
diamonds to sell on March 5 and March 25.
(2)
To maximize gross profit, Blossom Company should sell the diamonds with the
lowest
cost.
Demonstrate how Blossom Company could minimize its gross…
You have the following information for Blossom Company. Blossom Company uses the periodic method of accounting for its inventory transactions. Blossom Company only carries one brand and size of diamonds-all are identical. Each batch of diamonds purchased is carefully coded and marked with its purchase cost.
March 1
Beginning inventory 146 diamonds at a cost of $317 per diamond.
March 3
Purchased 189 diamonds at a cost of $340 each.
March 5
Sold 179 diamonds for $614 each.
March 10
Purchased 324 diamonds at a cost of $399 each.
March 25
Sold 408 diamonds for $681 each.
(a)
Your Answer
Correct Answer
Your answer is partially correct.
Assume that Blossom Company uses the specific identification cost flow method.
Demonstrate how Blossom Company could maximize its gross profit for the month by specifically selecting which diamonds to sell on March 5 and March 25.
To maximize gross profit, Blossom Company should sell the diamonds with the lowest
(2)
Demonstrate how Blossom Company could…
You have the following information for Blossom Company. Blossom Company uses the periodic method of accounting for its inventory
transactions. Blossom Company only carries one brand and size of diamonds-all are identical. Each batch of diamonds purchased is
carefully coded and marked with its purchase cost.
March 1
Beginning inventory 146 diamonds at a cost of $317 per diamond.
March 3
Purchased 189 diamonds at a cost of $340 each.
March 5
Sold 179 diamonds for $614 each.
March 10 Purchased 324 diamonds at a cost of $399 each.
March 25
Sold 408 diamonds for $681 each.
Chapter 6 Solutions
FINANCIAL ACCOUNTING
Ch. 6 - The key to successful business operations is...Ch. 6 - Prob. 2QCh. 6 - What is just-in-time inventory management? What...Ch. 6 - Prob. 4QCh. 6 - Prob. 5QCh. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - What is the major advantage and major disadvantage...Ch. 6 - The selection of an inventory cost flow method is...
Ch. 6 - Which assumed inventory cost flow method: (a)...Ch. 6 - Prob. 12QCh. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - Prob. 17QCh. 6 - Prob. 18QCh. 6 - Why is it inappropriate for a company to include...Ch. 6 - Prob. 20QCh. 6 - Prob. 21QCh. 6 - Prob. 22QCh. 6 - When perpetual inventory records are kept, the...Ch. 6 - How does the average-cost method of inventory...Ch. 6 - Prob. 6.1BECh. 6 - Prob. 6.3BECh. 6 - Prob. 6.4BECh. 6 - Prob. 6.6BECh. 6 - Prob. 6.7BECh. 6 - Prob. 6.8BECh. 6 - Prob. 6.9BECh. 6 - Prob. 6.10BECh. 6 - Prob. 6.11BECh. 6 - Prob. 6.12BECh. 6 - Prob. 6.1DIECh. 6 - Prob. 6.2DIECh. 6 - Prob. 6.3aDIECh. 6 - Prob. 6.1ECh. 6 - Prob. 6.2ECh. 6 - Prob. 6.3ECh. 6 - Prob. 6.4ECh. 6 - Prob. 6.5ECh. 6 - Prob. 6.6ECh. 6 - Prob. 6.7ECh. 6 - Prob. 6.9ECh. 6 - Prob. 6.10ECh. 6 - Inventory data for Jeters Company are presented in...Ch. 6 - Prob. 6.15ECh. 6 - Prob. 6.2APCh. 6 - Prob. 6.3APCh. 6 - Prob. 6.6APCh. 6 - Prob. 6.7APCh. 6 - Prob. 6.9APCh. 6 - Prob. 6.3EYCTCh. 6 - The July 15, 2010, edition of CFO.com contains an...Ch. 6 - Prob. 6.8EYCTCh. 6 - Prob. 6.9EYCTCh. 6 - Prob. 6.10EYCTCh. 6 - Prob. 6.11EYCTCh. 6 - Prob. 6.1IECh. 6 - Prob. 6.2IECh. 6 - Prob. 6.3IE
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- You have the following information for Blossom Company. Blossom Company uses the periodic method of accounting for its inventory transactions. Blossom Company only carries one brand and size of diamonds-all are identical. Each batch of diamonds purchased is carefully coded and marked with its purchase cost. March 1 Beginning inventory 146 diamonds at a cost of $317 per diamond. March 3 Purchased 189 diamonds at a cost of $340 each. March 5 Sold 179 diamonds for $614 each. March 10 Purchased 324 diamonds at a cost of $399 each. March 25 Sold 408 diamonds for $681 each. (a) Assume that Blossom Company uses the specific identification cost flow method. (1) Demonstrate how Blossom Company could maximize its gross profit for the month by specifically selecting which diamonds to sell on March 5 and March 25. (2) To maximize gross profit, Blossom Company should sell the diamonds with the cost. Demonstrate how Blossom Company could minimize its gross profit for the month by selecting which…arrow_forwardYou have the following information for Blossom Company. Blossom Company uses the periodic method of accounting for its inventory transactions. Blossom Company only carries one brand and size of diamonds-all are identical. Each batch of diamonds purchased is carefully coded and marked with its purchase cost. March 1 Beginning inventory 146 diamonds at a cost of $317 per diamond. March 3 Purchased 189 diamonds at a cost of $340 each. March 5 Sold 179 diamonds for $614 each. March 10 Purchased 324 diamonds at a cost of $399 each. March 25 Sold 408 diamonds for $681 each. (a) Your Answer Correct Answer Your answer is partially correct. Assume that Blossom Company uses the specific identification cost flow method. (1) Demonstrate how Blossom Company could maximize its gross profit for the month by specifically selecting which diamonds to sell on March 5 and March 25. (b) (2) To maximize gross profit, Blossom Company should sell the diamonds with the lowest ✓ cost. Demonstrate how Blossom…arrow_forwardYou have the following information for Blossom Company. Blossom Company uses the periodic method of accounting for its inventory transactions. Blossom Company only carries one brand and size of diamonds-all are identical. Each batch of diamonds purchased is carefully coded and marked with its purchase cost. March 1 Beginning inventory 146 diamonds at a cost of $317 per diamond. March 3 Purchased 189 diamonds at a cost of $340 each. March 5 Sold 179 diamonds for $614 each. March 10 Purchased 324 diamonds at a cost of $399 each. March 25 Sold 408 diamonds for $681 each. (a) Your answer is incorrect. Assume that Blossom Company uses the specific identification cost flow method. (1) Demonstrate how Blossom Company could maximize its gross profit for the month by specifically selecting which diamonds to sell on March 5 and March 25. (2) To maximize gross profit, Blossom Company should sell the diamonds with the cost. Demonstrate how Blossom Company could minimize its gross profit for the…arrow_forward
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