problem set #4 - COGS (AV.) = 13.92*(1800+2800) = $64,024.5...

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Xiangying Wu Problem Set #4 for Intro to Financial Accounting Due march 30(Tuesday) Problem 1: A. Understate B. Overstate C. Understate Problem 2: A. COGS(FIFO)= 1200*10+600*12+100*12+400*13+600*15+1200*16+500*18=$62,800 B. COGS(LIFO)= 800*18+1000*16+200*16+600*15+400*13+700*12+900*10=$65,200 C. COGS(AV.) AV. Cost=(1200*10+700*12+400*13+600*15+1200*16+800*18)/ (1200+700+400+600+1200+800)= 68200/4900=$13.92
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Unformatted text preview: COGS (AV.) = 13.92*(1800+2800) = $64,024.5 D. Net Income=Sale COGS Since the sale is the same, FIFO has smaller COGS than LIFO does. In this way, FIFO has a larger net income than LIFO does by $2,400(= 65,200- 62,800) E. Hartison Corporation prefers FIFO for financial reporting purpose because it will attract more inventors and customers to its company....
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This note was uploaded on 06/16/2011 for the course BUSI 100 taught by Professor Na during the Spring '10 term at University of North Carolina School of the Arts.

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