HWK__7 - and the cost of goods sold for the Spartan mugs...

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HOMEWORK #7 DUE FRIDAY, MARCH 18 (6 points) Green & White Corporation uses a periodic inventory system. One of the company’s most popular products is a Spartan mug. The inventory quantities, purchases, and sales of this product for the most recent year are as follows: Number Cost Total Of Units per Unit Cost Inventory, January……………………………… 150 $30.00 $4,500.00 Purchase, March 27 …..…………………………. . 250 32.00 8,000.00 Purchase, June 11 ………………………………. 360 32.50 11,700.00 Purchase, October 30 ……………………… 75 33.00 2,475.00 Goods available for sale Units Sold 500 Inventory, December 31 ? INSTRUCTIONS A. Using periodic costing procedures, computer the cost of the December 31 inventory
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Unformatted text preview: and the cost of goods sold for the Spartan mugs during the year under each of the following cost flow assumptions (show your work). 1. Last-in, first-out 2. First-in, first-out 3. Weighted Average cost (round to the nearest dollar, except unit cost) B. Which of the three inventory pricing methods provides the most realistic balance sheet valuation of inventory in light of the current replacement cost of the Spartan mugs? Explain. C. Assuming a 35% tax rate what method would Green & White choose if they wanted to minimize taxes paid? Can Green & White choose one inventory method for tax purposes to minimize taxes and a different method for financial reporting purposes to maximize income?...
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