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ACC - Bulldog Appliances uses the periodic inventory system

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Question;Bulldog Appliances uses the periodic inventory system. Details regarding the inventoryof appliances at September 1, 2011, purchases invoices during the next 12 months, and the inventory count at August 31, 2012, are summarized as follows:Purchases InvoicesModel Inventory,September 1 1st 2nd 3rd Inventory Count,August 31AZ09 __ 4 at $ 32 4 at $ 35 4 at $ 38 5GA85 8 at $ 88 4 at $ 79 3 at $ 85 6 at $ 92 7HI71 3 at 75 3 at 65 15 at 68 9 at 70 5KS32 7 at 242 6 at 250 5 at 260 10 at 259 9MS17 12 at 80 10 at 82 16 at 89 16 at 90 13ND52 2 at 108 2 at 110 3 at 128 3 at 130 5WV63 5 at 160 4 at 170 4 at 175 7 at 180 8Instructions1. Determine the cost of the inventory on August 31, 2012, by the first-in, first-out method.Present data in columnar form, using the following headings:Model Quantity Unit Cost Total CostIf the inventory of a particular model comprises one entire purchase plus a portionof another purchase acquired at a different unit cost, use a separate line for eachpurchase.2. Determine the cost of the inventory on August 31, 2012, by the last-in, first-out method,following the procedures indicated in (1).3. Determine the cost of the inventory on August 31, 2012, by the average cost method,using the columnar headings indicated in (1).4. Discuss which method (FIFO or LIFO) would be preferred for income taxpurposes in periods of (a) rising prices and (b) declining prices.

 

Paper#42491 | Written in 18-Jul-2015

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