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The purchases and issues of rubber gaskets (Materials Ledger #11216) as shown in the records of GT Corp. for November follow: Required:

The purchases and issues of rubber gaskets (Materials Ledger #11216) as shown in the records of GT Corp. for November follow:


Required:
1. Complete a materials ledger account similar to Figure 2-10 (the "On Order" columns should be omitted) for each of the following inventory costing methods, using a perpetual inventory system:
a. FIFO Costing:
Materials Ledger
Description Rubber gaskets Materials Ledger Account No. 11216
Received Issued Balance
Date Rec. Rep. No. Quantity Unit Price Amount Mat.Req. No. Quantity Unit Price Amount Quantity Unit Price Amount
11/1
11/4

11/5
11/8

11/15

11/22

11/28

b. LIFO Costing:
Materials Ledger
Description Rubber gaskets Materials Ledger Account No. 11216
Received Issued Balance
Date Rec. Rep. No. Quantity Unit Price Amount Mat.Req. No. Quantity Unit Price Amount Quantity Unit Price Amount
11/1
11/4

11/5

11/8

11/15

11/22


11/28


c. Moving Average Costing: (for this requirement, if necessary, carry unit prices to five decimal places and use that rounded figure in subsequent computations)
Materials Ledger
Description Rubber gaskets Materials Ledger Account No. 11216
Received Issued Balance
Date Rec. Rep. No. Quantity Unit Price Amount Mat.Req. No. Quantity Unit Price Amount Quantity Unit Price Amount
11/1
11/4
11/5
11/8
11/15
11/22
11/28
2. For each method, prepare a schedule that shows the total cost of materials transferred to Work in Process and the cost of the ending inventory. Round all numbers to the nearest dollar.
Inventory Method Cost Transferred to Work in Process Cost of Ending Inventory
FIFO $ $
LIFO $ $
Moving average $ $
3. If prices continue to increase, would you favor adopting the FIFO or the LIFO method? Explain.
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4. When prices continue to rise, what is the effect of FIFO versus LIFO on the inventory balance for materials reported in the balance sheet?

Discuss.
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Top Answer

Hi Student, please find... View the full answer

8424661.xlsx

a) First - in, First Out Method
Date Received
Quantity Per Unit Issued
Amount $ Quantity Balance Per Unit Amount $ Quantity Per Unit Amount $ Nov.
1
4 10,000 3.1 31000 5
8 50,000 3.3 165000 30,000...

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