Question
In: Accounting
Broadhead Company uses a periodic inventory system. At the end of the annual accounting period, December...
Broadhead Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2:
| Units | Unit Cost | ||||||||
| Inventory, December 31, prior year | 2,810 | $ | 13 | ||||||
| For the current year: | |||||||||
| Purchase, April 11 | 8,920 | 11 | |||||||
| Purchase, June 1 | 7,940 | 16 | |||||||
| Sales ($58 each) | 10,920 | ||||||||
| Operating expenses (excluding income tax expense) | $ | 186,500 | |||||||
|
1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO. 2. Compute the difference between the pretax income and the ending inventory amount for the two cases. 3. Which inventory costing method may be preferred for income tax purposes? |
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Solutions
ekkarill92 answered 1 year agoRelated Solutions
Broadhead Company uses a periodic inventory system. At the end of the annual accounting period, December...
Broadhead Company uses a periodic inventory system. At the end
of the annual accounting period, December 31 of the current year,
the accounting records provided the following information for
product 2:
Units Unit Cost
Inventory, December 31, prior year 2,880 $ 14
For the current year:
Purchase, April 11 8,880 12
Purchase, June 1 7,860 17
Sales ($50 each) 10,960
Operating expenses (excluding income tax expense) $ 193,500
1. Prepare a separate income statement through
pretax income that details cost...
Broadhead Company uses a periodic inventory system. At the end of the annual accounting period, December...
Broadhead Company uses a periodic inventory system. At the end
of the annual accounting period, December 31 of the current year,
the accounting records provided the following information for
product 2:
Units
Unit Cost
Inventory, December 31, prior
year
2,990
$
11
For the current year:
Purchase, April 11
8,810
9
Purchase, June 1
7,820
14
Sales ($60 each)
10,840
Operating expenses (excluding
income tax expense)
$
189,000
Required:
1. Prepare a separate income statement through
pretax income that details...
Broadhead Company uses a periodic inventory system. At the end of the annual accounting period, December...
Broadhead Company uses a periodic inventory system. At the end
of the annual accounting period, December 31 of the current year,
the accounting records provided the following information for
product 2: Units Unit Cost Inventory, December 31, prior year 2,940
$ 11 For the current year: Purchase, April 11 8,900 9 Purchase,
June 1 7,940 14 Sales ($60 each) 10,980 Operating expenses
(excluding income tax expense) $ 186,500
1. Prepare a separate income statement through
pretax income that details cost...
Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December...
Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Cost Inventory, December 31, prior year 2,000 Unit $3For the current year: Purchase, March 21 5,190 5Purchase, August 1 ...
Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December...
Nittany Company uses a periodic inventory system. At the end of
the annual accounting period, December 31 of the current year, the
accounting records provided the following information for product
1:
Units
Unit Cost
Inventory, December 31, prior year
1,890
$
5
For the current year:
Purchase, March 21
5,080
7
Purchase, August 1
3,000
8
Inventory, December 31, current year
4,180
Required:
Compute ending inventory and cost of goods sold for the current
year under FIFO, LIFO, and average...
Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December...
Nittany Company uses a periodic inventory system. At the end of
the annual accounting period, December 31 of the current year, the
accounting records provided the following information for product
1:
Inv Dec 31 prior year Units 2000 - $5 (unit cost)
Puchase march 21 : 5000 - $6
Purchase August 1: 3000 - $8
Inventory December 31 current year 4000: (blank)
Ending inventory (FIFO/LIFO/AVG COST)
Cost of goods sold (FIFO/LIFO/Avg Cost)
Emily Company uses a periodic inventory system. At the end of the annual accounting period, December...
Emily Company uses a periodic inventory system. At the end of
the annual accounting period, December 31 of the current year, the
accounting records provided the following information for product
2:
Units
Unit Cost
Inventory, December 31, prior year
2,890
$
12
For the current year:
Purchase, April 11
8,860
13
Purchase, June 1
7,930
18
Sales ($55 each)
10,860
Operating expenses (excluding income tax expense)
$
191,500
2. Compute the difference between the pretax
income and the ending inventory...
Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December...
Nittany Company uses a periodic inventory system. At the end of
the annual accounting period, December 31 of the current year, the
accounting records provided the following information for product
1:
Units
Unit Cost
Inventory, December 31, prior year
2,000
$
5
For the current year:
Purchase, March 21
5,000
6
Purchase, August 1
3,000
8
Inventory, December 31, current year
4,000
Required:
Compute ending inventory and cost of goods sold for the current
year under FIFO, LIFO, and average...
Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December...
Nittany Company uses a periodic inventory system. At the end of
the annual accounting period, December 31 of the current year, the
accounting records provided the following information for product
1:
Units
Unit Cost
Inventory, December 31, prior year
1,960
$
5
For the current year:
Purchase, March 21
5,020
7
Purchase, August 1
2,900
8
Inventory, December 31, current year
4,080
Required:
Compute ending inventory and cost of goods sold for the current
year under FIFO, LIFO, and average...
Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December...
Nittany Company uses a periodic inventory system. At the end of
the annual accounting period, December 31 of the current year, the
accounting records provided the following information for product
1:
Units
Unit Cost
Inventory, December 31, prior year
1,940
$
4
For the current year:
Purchase, March 21
5,110
6
Purchase, August 1
2,860
7
Inventory, December 31, current year
4,160
Required:
Compute ending inventory and cost of goods sold for the current
year under FIFO, LIFO, and average...
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