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Periodic Inventory by Three Methods Dymac Appliances uses the periodic inventory system. Details regarding the inventory...

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 $ 44 4 at $ 47 4 at $ 50 5
B15 8 at $ 94 4 at 85 3 at 91 6 at 98 7
E60 3 at 69 3 at 59 15 at 62 9 at 64 5
G83 7 at 221 6 at 229 5 at 239 10 at 238 9
J34 12 at 79 10 at 81 16 at 88 16 at 89 13
M90 2 at 116 2 at 118 3 at 136 3 at 138 5
Q70 5 at 163 4 at 173 4 at 178 7 at 183 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.

Previous

Solutions

Expert Solution

1.FIFO Method

Model

Quantity ($)

Unit Cost ($)

Total Cost ($)

A10

4

50

200

A10

1

47

47

B15

6

98

588

B15

1

91

91

E60

5

64

320

G83

10

238

2,380

J34

13

89

1,157

M90

3

138

414

M90

2

136

272

Q70

7

183

1,281

Q70

1

183

183

Total

52

1,326

6,933

2. Last in First Out Method

Model

Quantity ($)

Unit Cost ($)

Total Cost ($)

A10

4

44

176

A10

1

47

47

B15

7

94

658

E60

3

69

207

E60

2

59

118

G83

7

221

1,547

GF83

2

229

458

J34

12

79

948

J34

1

81

81

M90

2

116

232

M90

2

118

236

M90

1

136

136

Q70

5

163

815

Q70

3

173

519

Total

52

1,688

6,178

Weighted Method

Model

Quantity($)

Unit Cost ($)

Total Cost($)

AA10

5

47

235

B15

7

93

653

E60

5

63

315

G83

9

232

2,088

J34

13

85

1,105

M90

5

129

645

Q70

8

175

1,400

Total

52

824

6,441

4. It's better to use last in first out (LIFO) method when there is rice in price because last in inventory will have the high cost which will reduce the gross profit and income tax payable.

Notes

Total cost = Unit price * Number unit in inventory.

Per unit cost in weighted average method = total cost on purchase of units /Number of units purchased.


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