Question

1. Periodic Inventory by Three Methods

   Dymac Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1, purchases invoices during the next 12 months, and the inventory count at December 31 are summarized as follows:

   Purchases Invoices
   Model	Inventory, January 1		1st		2nd		3rd		Inventory Count, December 31
   A10	__		4 at	$ 64	4 at	$ 70	4 at	$ 76	6
   B15	8 at	$ 176	4 at	158	3 at	170	6 at	184	8
   E60	3 at	75	3 at	65	15 at	68	9 at	70	5
   G83	7 at	242	6 at	250	5 at	260	10 at	259	9
   J34	12 at	240	10 at	246	16 at	267	16 at	270	15
   M90	2 at	108	2 at	110	3 at	128	3 at	130	5
   Q70	5 at	160	4 at	170	4 at	175	7 at	180	8

   Required:

   1. Determine the cost of the inventory on December 31 by the first-in, first-out method.

   If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the units PURCHASED MOST RECENTLY first.

   Dymac Appliances Cost of the Inventory-FIFO Method December 31
   Model	Quantity		Unit Cost		Total Cost
   A10		$		$
   A10
   B15
   B15
   E60
   G83
   J34
   M90
   M90
   Q70
   Q70
   Total				$

   2. Determine the cost of the inventory on December 31 by the last-in, first-out method.

   If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the OLDEST units first.

   Dymac Appliances Cost of the Inventory-LIFO Method December 31
   Model	Quantity		Unit Cost		Total Cost
   A10		$		$
   A10
   B15
   E60
   E60
   G83
   G83
   J34
   J34
   M90
   M90
   M90
   Q70
   Q70
   Total				$

   3. Determine the cost of the inventory on December 31 by the weighted average cost method.

   Dymac Appliances Cost of the Inventory-Weighted Average Method December 31
   Model	Quantity		Unit Cost		Total Cost
   A10		$		$
   B15
   E60
   G83
   J34
   M90
   Q70
   Total				$

   4.   would be preferred for income tax purposes in periods of rising prices.

Answer 1

Answer 1

Lets determine the cost of the inventory on December 31 by the first-in first-out (FIFO) method

Model	Quantity	Unit Cost(In $)	Total Cost(In $)	Calculations
A10	4	76	304	76*4
A10	2	70	140	70*2
B15	6	184	1,104	184*6
B15	2	170	340	170*2
E60	5	70	350	70*5
G83	9	259	2,331	259*9
J34	15	270	4050	270*15
M90	3	130	390	130*3
M90	2	128	256	128*2
Q70	7	180	1260	180*7
Q70	1	175	175	175*1

Total cost of the inventory ==> $10,700

Answer 2

Lets determine the cost of the inventory on Dec 31 by the last-in, first-out(LIFO) method

model	Quantity	Unit Cost(in $)	Total Cost(in $)	Calculations
A10	4	64	256	64*4
A10	2	70	140	70*2
B15	8	176	1408	176*8
E60	3	75	225	75*3
E60	2	65	130	65*2
G83	7	242	1694	242*7
G83	2	250	500	250*2
J34	12	240	2880	240*12
J34	3	246	738	246*3
M90	2	108	216	108*2
M90	2	110	220	110*2
M90	1	128	128	128*1
Q70	5	160	800	160*5
Q70	3	170	510	170*3

Total cost of the inventory ==> $9845.

Answer 3

Lets determine the cost of the inventory on Dec 31 by the weighted average cost method:

Model	Quantity	Unit Cost(In $)	Total Cost(in $)	Calculations
A10	6	70	420	70*6
B15	8	174	1392	174*8
E60	5	69	345	69*5
G83	9	253	2277	253*9
J34	15	258	3870	258*15
M90	5	121	605	121*5
Q70	8	172	1376	172*8

Total cost of inventory ==> 10,285

Answer 4

Last In First Out(LIFO)

Last In First Out approach would be favored for revenue tax proposals in the duration of raising rates.
Description: Following the Last in first out approach the cost of goods marketed is more expensive in the market for increasing rates. The record acquired recently at a costlier amount will be analyzed for the cost of goods marketed supporting the Last In First Out process. This will draw down the revenue, the tax advantage is possible on the reduced income.

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