it needs to make an arbitrary choice as to the assumed unit price, because a specific identification of the given items sold and unsold proves both expensive and impossible to achieve. Three major assumptions are First-in, first-out (FIFO), last-in, first-out (LIFO) and weighted average cost. Although the attribute being calculated is historical cost in all methods, the result is arbitrary
Words: 4341 - Pages: 18
| |FIFO |LIFO |Average Cost | |Sale |730,000 |730,000 |730,000 | |Beginning Inventory |120,000 |120,000 |120,000 | |Purchases |360,000 |360,000
Words: 445 - Pages: 2
the current year which could result in a change in the taxable income for the current year. If you maintain an inventory you do not expense it as you purchase it, buying ahead would only affect your inventory on hand and your cost of goods. The LIFO accounting method for a business’s inventory (standing for last in, first out) has come under fire from Congress and the White House Sometime in 2012 President Obama recommended repealing this accounting method, saying it was a way for businesses to
Words: 559 - Pages: 3
Workshop Three: Case Studies Case 6-2: A + B + C) FIFO, LIFO, AND AVERAGE COST METHODS FOR 2005, 2006, 2007: FIFO 2005 COGS 1840 X $20 total= $36,800 600 X $20.25 $12,150 380 X $21 $7,980 2820 X $56,930 2005 inventory 420 X 21 total= $8,820 400 X 21.25 $8,500 200 X 21.5 $4,300 1020 $21,620 LIFO 2005 COGS 200 X 21.5 TOTAL= $4,300 400 X 21.25 $8,500 800 X 21 $16,800 600 X 20.25 $12,150
Words: 682 - Pages: 3
ExxonMobil Analysis Metra Walthour American Public University System ExxonMobil is an American established gas and oil firm that has a head office in the metropolis of Irving, Texas. Even though it is American established and holds its head office in Texas, it is additionally a multinational firm that is recognized and utilized worldwide. The Exxon Firm was instituted in the year of 1934 across the mergence of the Average Oil Firm of New Jersey
Words: 1847 - Pages: 8
(a) average-cost, (b) LIFO, and (c) FIFO. Explain how you calculated each answer. Hi Welcome to Just Answer. The ending inventory contains 200 units. Since the purchase price increases throughout the month, the ending inventory cost would be different when we use different ways in computing the cost. Average Cost Method: The price can be computed using a weighted average method. So, the price is $3.5 per unit. The ending inventory cost is $3.5 (200) = $700 FIFO: Units purchased first
Words: 591 - Pages: 3
Company A Partners From: Andrew Wilcox Date: 8/27/14 Re: Inventory Method Recommendation After calculating your ending inventory values using the Periodic and perpetual FIFO, Periodic average, and Perpetual LIFO methods, the following conclusions can be made. To calculate the Periodic FIFO ending inventory value, the total number of units sold is subtracted from the total number of units on hand at the beginning of the period plus the total number of units purchased during the
Words: 588 - Pages: 3
Primarily concerned with the health of the operating aspects of the business.Edward Drewery Controller for Morgan ManufacturingCompetitor of Morgan Manufacturing 5. Morgan ManufacturingMorgan Manufacturing uses LIFO as its inventory costing method and provides the LIFO reserve.Westwood uses FIFO as its inventory costing method.Events and Facts: Morgan OperationsProductivity ImprovementsFinancial StatementsComparison of Operating PerformanceOver 2006, Morgan Manufacturing implemented significant productivity
Words: 687 - Pages: 3
Name Financial Accounting Instructor Kimmel, Weygandt, & Kieso Section # Date |Part |I |II |III |IV |V |Total | |Points |45 |25 |12 |10 |8 |100 | |Score | | | | | | | PART I — MULTIPLE CHOICE (45 points) Instructions Designate the best answer for each of the following questions
Words: 1789 - Pages: 8
Name] [Writer’s Name] [Course] [Date] Week 3 - DQs 1. LIFO vs. FIFO The controller of Sagehen Enterprises believes that the company should switch from the LIFO method to the FIFO method. The controller’s bonus is based on the next income. It is the controller’s belief that the switch in inventory methods would increase the net income of the company. What are the differences between the LIFO and FIFO methods? Guided Response: Analyze several of your peers’
Words: 1002 - Pages: 5
