Solution-Calculate net income under fifo and lifo

Calculate net income under fifo and lifo

Assignment Help Financial Accounting

Reference no: EM131104697

Cost flow assumptions-FIFO, LIFO, and weighted average using a periodic system The following data are available for Sellco for the fiscal year
ended on January 31, 2014:

	Units	Unit Price	$
Sales	3,200
Beginning Inventory	1,000	$4.00	$4,000
Purchases -in date order	1,200	$5.00	$6,000
	1,600	$6.00	$9,600
	800	$8.00	$6,400

Required:

a. Calculate cost of goods sold and ending inventory under the following cost flow assumptions (using a periodic inventory system):

1. FIFO.

	Units	Unit Price	$	$
Beginning Inventory	1,000	$4.00		$4,000
Purchases
	1,200	$5.00	$6,000
	1,600	$6.00	$9,600
	800	$8.00	$6,400	$22,000
Available	4,600			$26,000
Ending Inventory (1,000 +3,600 less 3,200) = 1,400

				$0

2. LIFO

	Units	Unit Price	$	$
Beginning Inventory	1,000	$4.00		$4,000
Purchases
	1,200	$5.00	$6,000
	1,600	$6.00	$9,600
	800	$8.00	$6,400	$22,000
Available	4,600			$26,000
Ending Inventory (1,000 +3,600 less 3,200) = 1,400

				$0

3. Weighted average. Round the unit cost answer to two decimal places and ending inventory to the nearest $10.

Beginning Inventory	1,000	$4.00		$4,000
Purchases
	1,200	$5.00	$6,000
	1,600	$6.00	$9,600
	800	$8.00	$6,400	$22,000
Available	4,600			$26,000
Weighted Average
Cost of Goods sold-3,200 units
Ending Inventory

b. Assume that net income using the weighted-average cost flow assumption is $116,000. Calculate net income under FIFO and LIFO.

Weighted Average proof
Income
CGS
Sales value
FIFO Income
Sales
CGS
Net Income
LIFO Incme
Sales
CGS
Net Income

Reference no: EM131104697

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Calculate net income under fifo and lifo

Reference no: EM131104697

Reference no: EM131104697

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