study_note_for_inventory_costing_methods(1)

study_note_for_inventory_costing_methods(1) - specific...

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Inventory Costing Methods A) Specific Identification Method B) Average Cost Method C) First-In, First-Out (FIFO) Method D) Last-In, Last-Out )(LIFO) Method Sample Problem 1. Using the periodic inventory system, the following is the goods flow of Cappo Company for the month June: Date Explanation Quantity Unit Cost Total Cost June 1 Inventory 50 units $ 1.00 $ 50 6 Purchase 50 units 1.10 55 13 Purchase 150 units 1.20 180 20 Purchase 100 units 1.30 130 25 Purchase 150 units 1.40 210 Goods Available for Sale 500 units 625 Sales 280 units On hand june 30 220 units A) SPECIFIC IDENTIFICATION METHOD: Assume that the June 30 inventory consists of 50 units from the June 1 inventory, 100 units from the the purchase of June 13, and 70 units from the purchase of June 25. How much would be the cost assigned to the inventory under the specific identification method? (Answer: $ 268) B) AVERAGE COST METHOD: Assume that the units in the ending inventory cannot be identified as coming from the
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Unformatted text preview: specific purchases. How much would be the cost assigned to the inventory under the average cost method? (Answer: $ 275) C) FIRST-IN, FIRST-OUT METHOD: Assume that the cost of the first items acquired should be assigned to the first items sold. (In other words, assume that the cost of goods on hand in the end of the period is from the most recent purchases) How much would be the cost assigned to the inventory under first-in, first-out method? (Answer: $ 301) D) LAST-IN, FIRST-OUT METHOD: Assume that the cost of the last items purchased should be assigned to the first items sold. (In other words, assume that the cost of goods on hand in the end of the period is from the earliest purchases) How much would be the cost assigned to the inventory under last-in, last-out method? (Answer: $ 249)...
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