Periodic Inventory by Three Methods Dymac Appliances uses the periodic inventory system. Details regarding the inventory
Posted: Sun Jul 03, 2022 1:17 pm
Periodic Inventory by Three Methods
Dymac Appliances uses the periodic inventory system. Detailsregarding the inventory of appliances at January 1, purchasesinvoices during the next 12 months, and the inventory count atDecember 31 are summarized as follows:
Required:
1. Determine the cost of the inventory onDecember 31 by the first-in, first-out method.
If the inventory of a particular model comprises one entirepurchase plus a portion of another purchase acquired at a differentunit cost, use a separate line for each purchase. If units are ininventory at two different costs, enter the units PURCHASED MOSTRECENTLY first.
2. Determine the cost of the inventory onDecember 31 by the last-in, first-out method.
If the inventory of a particular model comprises one entirepurchase plus a portion of another purchase acquired at a differentunit cost, use a separate line for each purchase. If units are ininventory at two different costs, enter the OLDEST units first.
3. Determine the cost of the inventory onDecember 31 by the weighted average cost method.
4a. Which inventory method would bepreferred for income tax purposes in periods of rising prices?
FIFO methodLIFO methodSpecific identification methodWeightedaverage method
4b. Which inventory method would bepreferred for income tax purposes in periods of decliningprices?
Dymac Appliances uses the periodic inventory system. Detailsregarding the inventory of appliances at January 1, purchasesinvoices during the next 12 months, and the inventory count atDecember 31 are summarized as follows:
Required:
1. Determine the cost of the inventory onDecember 31 by the first-in, first-out method.
If the inventory of a particular model comprises one entirepurchase plus a portion of another purchase acquired at a differentunit cost, use a separate line for each purchase. If units are ininventory at two different costs, enter the units PURCHASED MOSTRECENTLY first.
2. Determine the cost of the inventory onDecember 31 by the last-in, first-out method.
If the inventory of a particular model comprises one entirepurchase plus a portion of another purchase acquired at a differentunit cost, use a separate line for each purchase. If units are ininventory at two different costs, enter the OLDEST units first.
3. Determine the cost of the inventory onDecember 31 by the weighted average cost method.
4a. Which inventory method would bepreferred for income tax purposes in periods of rising prices?
FIFO methodLIFO methodSpecific identification methodWeightedaverage method
4b. Which inventory method would bepreferred for income tax purposes in periods of decliningprices?