Question

In: Accounting

1. Stratford Company reported the following information related to its operations for the year ended December...

1.

Stratford Company reported the following information related to its operations for the year ended

December 31, 2019. The owner, Ms. Keith, has asked you, Senior Accountant, to perform

some calculations in an effort to determine which inventory valuation method to select for

financial reporting purposes.

Date		# of Units	Unit Cost
February 17	Beginning inventory	145	$25
May 23	Purchase	193	$28
August 19	Purchase	127	$32
December 31	Purchase	74	$35

The company sold 415 units throughout the year at a price of $60 each.

a) Is this company operating in an inflationary or deflationary environment? Explain how you know.

Compute the dollar value of ending inventory under the following alternative methods:

FIFO

Weighted-average cost

Compute the dollar value of cost of goods sold under the following alternative methods:

FIFO

Weighted-average cost

If Stratford Company sold each unit for $58, calculate the gross profit under the following assumptions:

FIFO

Weighted-average

Expert Solution

Note : Please comment down for any further clarifications.

ekkarill92 answered 2 years ago

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