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Determine the difference in the amount of income

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Reference no: EM132934355

Mumford & Sons Company uses the periodic inventory method and had the following inventory information available:

                                              Units              Unit Cost               Total Cost
1/1 Beginning Inventory      100                  $4                     $ 400
1/20 Purchase                   400                  $6                   2,400
7/25 Purchase                   200                    $7                    1,400
10/20 Purchase                 300                   $8                    2,400
                                         1,000                                     $6,600

A physical count of inventory on December 31 revealed that there were 350 units on hand.

Instructions

Problem 1. Assume that the company uses the FIFO method. The value of the ending inventory at December 31 is $__________.

Problem 2. Assume that the company uses the Average-Cost method. The value of the ending inventory on December 31 is $__________.

Problem 3. Assume that the company uses the LIFO method. The value of the ending inventory on December 31 is $__________.

Problem 4. Determine the difference in the amount of income that the company would have reported if it had used the FIFO method instead of the LIFO method. Would income have been greater or less?

Reference no: EM132934355

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