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	$ 40	4 at	$ 43	4 at	$ 46	5
   B15	8 at	$ 82	4 at	73	3 at	79	6 at	86	7
   E60	3 at	68	3 at	58	15 at	61	9 at	63	5
   G83	7 at	247	6 at	255	5 at	265	10 at	264	9
   J34	12 at	84	10 at	86	16 at	93	16 at	94	13
   M90	2 at	117	2 at	119	3 at	137	3 at	139	5
   Q70	5 at	155	4 at	165	4 at	170	7 at	175	8

   Required:

   1. Determine the cost of the inventory on December 31 by the The method of inventory based on the assumption that the cost of goods sold should be charged against revenue in the order in which costs were incurred.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 A method of inventory costing based on the assumption that the most recent inventory costs should be charged against revenue.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 A method of inventory costing in which the cost of the units sold and in ending inventory is a weighted average of the purchase costs.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				$

   4a. Which inventory method would be preferred for income tax purposes in periods of rising prices?

     

   • FIFO method
   • LIFO method
   • Specific identification method
   • Weighted average method

   4b. Which inventory method would be preferred for income tax purposes in periods of declining prices?

     

   • FIFO method
   • LIFO method
   • Specific identification method
   • Weighted average method

Answer 1