As s umethatspeedworldus es aperpetualinv entory s y

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Unformatted text preview: ear, Speed World purc has ed eight of thes e c y c les at the following c os ts : Purc has e Date J uly 1 J uly 22 Aug. 3 Units Purc has ed Unit Cos t Total Cos t 2 $ 4,950 $ 9,900 3 5,000 15,000 3 5,100 15,300 8 $ 40,200 On J uly 28, Speed World s old four Kaz omma 900 dirt bik es to the Vinc e Wils on rac ing team. The remaining four bik es remained in inv entory at September 30, the end of Speed World's fis c al y ear. As s ume that Speed World us es a perpetual inv entory s y s tem. a(1) Compute the c os t of goods s old relating to the s ale on J uly 28 and the ending inv entory of Kaz omma 900 dirt bik es at September 30, us ing av erage c os t method. (Om it the "$" sign in your response.) Cos t of goods s old Ending inv entory $ $ 19,920 20,280 a(2) Compute the c os t of goods s old relating to the s ale on J uly 28 and the ending inv entory of Kaz omma 900 dirt bik es at September 30, us ing FIFO method. (Om it the "$" sign in your response.) Cos t of goods s old Ending inv entory $ $ 19,900 20,300 a(3) Compute the c os t of goods s old relating to the s ale on J uly 28 and the ending inv entory of Kaz omma 900 dirt bik es at September 30, us ing LIFO method. (Om it the "$" sign in your response.) Cos t of goods s old Ending inv entory $ $ 19,950 20,250 b(1) Whic h of the three c os t flow as s umptions will res ult in Speed World Cy c les reporting the highes t net inc ome for the c urrent y ear? FI FO b(2) Whic h of the three c os t flow as s umptions will minimiz e the inc ome tax es owed by Speed World Cy c les for the y ear? LIFO b(3) May Speed World Cy c les us e the c os t flow as s umption that res ults in the highes t net inc ome for the c urrent y ear in its financ ial s tatements , but us e the c os t flow as s umption that minimiz es tax able inc ome for the c urrent y ear in its inc ome tax return? No Explanation: a (1 ) e z to.mhe c loud.mc gr a w- hill.c om/hm_a c c ounting.tpx? todo= pr intvie w 6/7 11/18/13 Assignme nt Pr int Vie w Average­cost method: (a) Cos t of goods s old on J uly 28: Av erage unit c os t (as of J uly 22; $24,900 ÷ 5 units ) Cos t of goods s old (4 units @ $4,980) (b) Ending inv entory (4 units ) at September 30: $ 4,980 $ 19,920 Av erage unit c os t following Augus t 3 purc has e: 1 unit at J uly 22 av erage c os t of $4,980 3 units purc has ed on Augus t 3 Total Av erage unit c os t as of Augus t 3 ($20,280 ÷ 4 units ) Ending inv entory , September 30 (4 units @ $5,070) $ 4,980 15,300 $ 20,280 $ 5,070 $ 20,280 $ 5,000 15,300 $ 9,900 10,000 $ 15,000 4,950 $ 4,950 15,300 $ 19,950 a (2 ) First­in, first­out (FIFO) method: (a) Cos t of goods s old on J uly 28: 2 units from J uly 22 purc has e @ $5,000 Cos t of goods s old (4 units ) (b) Ending inv entory (4 units ) at September 30: 1unit from J uly 22 purc has e @ $5,000 3 units from Augus t 3 purc has e @ $5,100 Ending inv entory , September 30 $ 19,900 $ 20,300 a (3 ) Last­in, first­out (LIFO) method: (a) Cos t of goods s old on J uly 28: 3 units from purc has e of J uly 22 @ $5,000 1 unit from purc has e of J uly 1 @ $4,950 Cos t of goods s old (4 units ) (b) Ending inv entory (4 units ) at September 30: 1 unit from purc has e on J uly 1 @ $4,950 3 units from purc has e on Augus t 3 @ $5,100 Ending inv entory , September 30 $ 20,250 e z to.mhe c loud.mc gr a w- hill.c om/hm_a c c ounting.tpx? todo= pr intvie w 7/7...
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This document was uploaded on 03/03/2014 for the course MGMT ACCOU 2300 at Rensselaer Polytechnic Institute.

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