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Assignment for Chapter 6

# Assignment for Chapter 6 - inventory method All sales...

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ACCT 2111 Introductory Financial Accounting Assignment for Chapter 6 Question 1 Hades Company had a beginning inventory on January 1 of 100 units of Product WD- 44 at a cost of \$84 per unit. During the year, the following purchases were made. Mar. 15 300 units at \$96 Sept. 4 300 units at \$112 July 20 200 units at \$100 Dec. 2 100 units at \$120 800 units were sold. Hades Company uses a periodic inventory system. Instructions (a) Determine the cost of goods available for sale. (b) Determine (1) the ending inventory, and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost). Prove the accuracy of the cost of goods sold under the FIFO and LIFO methods. (c) Which cost flow method results in (1) the highest inventory amount for the balance sheet, and (2) the highest cost of goods sold for the income statement?

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ACCT 2111 Introductory Financial Accounting Question 2 Persephone Inc. is a retailer operating in Torino, Italy. Persephone uses the perpetual
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Unformatted text preview: inventory method. All sales returns from customers result in the goods being returned to inventory; the inventory is not damaged. Assume that there are no credit transactions; all amounts are settled in cash. You are provided with the following information for Persephone Inc. for the month of January 2008. Date Description Quantity Unit Cost or Selling Price January 1 Beginning inventory 50 \$60 January 5 Purchase 100 70 January 8 Sale 80 125 January 10 Sale return 10 125 January 15 Purchase 30 90 January 16 Purchase return 5 90 January 20 Sale 75 125 January 25 Purchase 10 100 Instructions (a) For each of the following cost flow assumptions, calculate (i) cost of goods sold, (ii) ending inventory, and (iii) gross profit. (Round moving-average-cost to three decimal places.) (1) LIFO. (2) FIFO (3) Moving-average-cost. (b) Compare results for the three cost flow assumptions....
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Assignment for Chapter 6 - inventory method All sales...

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