Explanation Average cost method: Under average cost method inventories are priced at the average of all available inventories. Average cost is the quotient of total cost of goods available for sale and total units available for sale. First-in-First-Out (FIFO): In First-in-First-Out method, the first purchased items are sold first. The value of the ending inventory consists of the recently purchased items. Last-in-First-Out (LIFO): In Last-in-First-Out method, the last purchased items are sold first. The value of the closing stock consists of the initially purchased items. The inventory method that can be used for the following situations are as follows: Situation Inventory method a. FIFO As the inventory costs are increasing, the company has to reduce the expenses to report the high income. So FIFO method can be used. b. Any method If the company uses the FIFO method, it can report high income...

Financial Accounting, Student Value Edition (12th Edition)

12th Edition

ISBN: 9780134727066

Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.

Publisher: PEARSON

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Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

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Chapter 6, Problem 6.78CEP

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To identify: The inventory that can be used for the situations that are given.

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Chapter 6, Problem 6.77BP

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State which of the following inventory methods would best attain the goals of management. Indicate your answer by writing the proper letter in the blank beside each specific goal. FIFO LIFO Weighted-average Specific identification Management wants to report approximate current inventory replacement costs on its year-end balance sheet during a period of rising prices. Management wants to maximize net income during a period of rising prices. The company sells yachts, deep-sea fishing boats, and off-shore speed boats. Management wants to maximize net income during a period of falling prices. Management wants to minimize net income during a period of falling prices. Management wants to match current cost of goods sold with

Click to watch the Tell Me More Learning Objective 7 video and then answer the questions below. 1. The total units to be produced in a period is calculated as a. estimated units sold plus desired ending inventory less estimated beginning inventory b. estimated units sold less desired ending inventory add estimated beginning inventory c. estimated units sold plus desired ending inventory plus estimated beginning inventory d. estimated units sold less desired ending inventory less estimated beginning inventory b 2. Cost of goods sold is calculated as a. beginning finished goods inventory plus cost of goods manufactured less beginning finished goods inventory b. beginning finished goods inventory plus cost of goods manufactured plus beginning finished goods inventory c. beginning finished goods inventory less cost of goods manufactured less beginning finished goods inventory d. beginning finished goods inventory less cost of goods manufactured plus beginning finished goods inventory d…

You have been hired by Johnson and Johnson Corp. this year. Your supervisor approaches you and need you recommendation on the inventory valuation assumption you will recommend for the company to use instead to using Specific Identification method. Instruction: Identify each of the cost flow assumptions that company can use. Explain the advantages and disadvantages of using each of them. Each one will you recommend and Why? What are the characteristics of a Just-in-time inventory system? Explain some advantages and risks of Just-in-time inventory system.

Chapter 6 Solutions

Financial Accounting, Student Value Edition (12th Edition)

Ch. 6 - Ravenna Candles recently purchased candleholders...Ch. 6 - Which inventory system maintains a running record...Ch. 6 - How is cost of goods sold classified in the...Ch. 6 - Snyders total cost of goods available for sale...Ch. 6 - Snyders cost of goods sold using the average-cost...Ch. 6 - Snyders ending inventory using the FIFO method...Ch. 6 - Snyders cost of goods sold using the LIFO method...Ch. 6 - Which U.S. GAAP principle or rule would apply if...Ch. 6 - Corrigan Corporation had beginning inventory of...Ch. 6 - Corrigans gross profit for the period is a.79,000....

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The inventory that can be used for the situations that are given.

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