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Prepare a partial income statement through gross profit under the average, FIFO, and LIFO methods

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Question

The records of bell Aviation include the following accounts for inventory of aviation fuel at July 31 of the current year.;Transactions Sales Revenue;Jan 24 purchase 8,500 units @$7.50 63,750 Jul 31 9040 units;Apr 8 purchase 500 units @ 8.20 4100;Requirements;1. Prepare a partial income statement through gross profit under the average, FIFO, and LIFO methods. Round average cost per unit to four decimal places and all other amounts to the nearest whole dollar.;2. Which inventory method would you use to minimize income tax. Explain why this method causes income tax to be the lowest. Use (a). average-cost (b). FIFO (c). LIFO. Profit is lowest under (a). average-cost (b). FIFO (c). LIFO. When the inventory cost are (a). Falling (b). Rising (c). Static;More Info;Aug 1 Balance 700 units @ $5.00 $3,500;Nov 5 Purchase 300 units @ $5.50 $ 1650

 

Paper#20366 | Written in 18-Jul-2015

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