Compute the cost of goods sold for june

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Problem - Alternative Inventory Methods - Park Company's perpetual inventory records indicate the following transactions in the month of June:

 

Units

Cost/Unit

Inventory, June 1

200

$3.20

Purchases:



June 3

200

3.50

June 17

250

3.60

June 24

300

3.65

Sales:



June 6

300


June 21

200


June 27

150


Required -

1. Compute the cost of goods sold for June and the inventory at the end of June using each of the following cost flow assumptions:

a. FIFO

b. LIFO

c. Average cost (Round unit costs to 3 decimal places and other amounts to the nearest dollar.)

2. Why are the cost of goods sold and ending inventory amounts different for each of the three methods? What do these amounts tell us about the purchase price of inventory during the year?

3. Which method produces the most realistic amount for net income? For inventory? Explain your answer.

4. If Park uses IFRS, which of the previous alternatives would be acceptable and why?

Reference no: EM132882755

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