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question applying and analyzing inventory costing methods at the beginning of the cu 4281374

Question

Applying and Analyzing Inventory Costing Methods At the beginning of the current period. Chen carried 1.000 units of its product with a unit cost of $20. A summary of purchases during the current period follows. During the period, Chen sold 2,800 units. Uni s Unit Cost Cost Beginning Inventory 1,000 20 20,000 22 39,600 Purchase E1 800 26 20,800 Purchase it2 800 Purchase i3 1,200 29 34,800 (a) Assume that Chen uses the first-in, first-out method. Compute both cost of good sold for the current period and the ending inventory balance. Use the financial statement effects template to record cost of goods sold for the period Ending inventory balance Cost of goods sold Balance Sheet ncome Statement Transaction Cash Asset Noncash Assets Liabilities Contributed Capital Earned Capital Revenue Expenses Ne Record FIFO cost of goods sold (b) Assume that Chen uses the last-in, first-out method. Compute both cost of good sold for the current period and the ending inventory balance. Ending inventory balance Cost of goods sold Ending inventory balance Cost of goods sold (d) Which of these three inventory costing methods would you choose to: Average cost 1. Reflect what is probably the physical flow of goods? LIFO O Average cost 2. Minimize income taxes for the period? LIFO 3. Report the largest amount of income for the period? O LIFO FIFO Average Cost

 

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