Dejohnnitta_Porter_Week 4 Assignment - Assignment 8-1 FIFO and LIFO Inventory FIFO Assumptio n Sales(Revenue Cost of Sales Beginning Inventory Plus

# Dejohnnitta_Porter_Week 4 Assignment - Assignment 8-1 FIFO...

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Assignment 8-1FIFO and LIFO InventoryFIFOAssumptionFIFO Inventory EffectSales (Revenue)\$90,000Cost of Sales:500 units @\$50\$25,000Beginning Inventory400 units @\$50\$20,000Plus: Purchases100 units @\$65\$6,500400 units @\$80\$32,000Subtotal\$51,500Less: Ending Inventory400 units @\$80\$32,000Cost of Sales\$19,500Cost of Goods Sold is 21.6% of salesLIFOAssumptionLIFO Inventory EffectSales (Revenue)\$90,000Cost of Sales500 units @\$50\$25,000Beginning Inventory400 units @\$50\$20,000Plus: Purchases100 units @\$65\$6,500400 units @\$80\$32,000Subtotal\$51,500Less: Ending Inventory500 units @\$50\$25,500Cost of Sales\$26,500Cost of Goods Sold is 29.4% of salesLIFO has a higher cost of goods sold which means it has more inventory available for sale. I stands to make the company more money than FIFO; the difference is about \$7,000.Assignment 8-2 Inventory TurnoverCost of Goods Sold: 25,000.00Beginning Inventory balance: 20,000.00Ending Inventory balance: 25,500.00Inventory Turnover Ratio: 1.10Days in Inventory: 332.15 days
LIFOAverage Inventory (\$)\$22,750Inventory Turnover1.10FIFOCost of Goods Sold: 25,000.00Beginning Inventory balance: 20,000.00Ending Inventory balance: 32,000.00