Solution-At what amount should they record as cost of goods

At what amount should they record as cost of goods sold

Reference no: EM133177815

Question - Double Dipper Ice Cream company uses the LIFO method to account for their inventory. Inventory transactions for the first quarter of 2020 were as follows:

January 1: Beginning Inventory 1,000 lbs. @ $ 3.50 / lb.

February 5: Manufactured 500 lbs. @ $ 4.00 / lb.

March 26: Sold 1,200 lbs. @ $ 6.00 / lb.

Double Dipper expects to manufacture 2,200 lbs. during the remaining three quarters of the fiscal year, at a cost of $ 4.50 per pound.

A. Assuming that Double Dipper follows the integral theory of financial reporting, and incorporates any estimates of transactions anticipated to occur prior to the end of the fiscal year, at what amount should they record as "Cost of Goods Sold" for the first quarter?

B. Would your answer change if you assumed that 1,700 lbs. of inventory would be sold during the last three fiscal quarters? If so, in what way?

Reference no: EM133177815

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At what amount should they record as cost of goods sold

Reference no: EM133177815

Reference no: EM133177815

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