ACCT 2001 Chapter : Chapter 5
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Periodic Inventory Method | |||||||||
Better Bottles, Inc. uses a PERIODIC inventory system and has the following information available: | |||||||||
Description | # of Units | Cost per Unit | Total Cost | ||||||
Beginning inventory | 20 | $20.00 | $400 | ||||||
Jan 5 sold | 15 | ||||||||
Jan 15 purchase | 27 | $22.00 | 594 | ||||||
Jan 18 sold | 21 | ||||||||
Jan 20 purchase | 33 | $30.00 | 990 | ||||||
Total goods available for sale | 80 | $1,984 | |||||||
Total goods sold | 36 | ||||||||
Required: | |||||||||
1 | Calculate both Cost of goods sold and Ending inventory using the Periodic FIFO Method. | ||||||||
2 | Calculate both Cost of good sold and Ending Inventory using Periodic LIFO Method. | ||||||||
3 | Use your calculations from 1-2 and complete the Income Statement. | ||||||||
The company income tax rate: | 0.25 | ||||||||
1 | FIFO Cost of Goods Sold - PERIODIC | ||||||||
Units Sold Taken From: | # of Units | Cost per Unit | Total Cost | ||||||
Total Cost of Goods Sold FIFO | |||||||||
FIFO Ending Inventory - PERIODIC | |||||||||
Inventory Available | # of Units | Cost per Unit | Total Cost | ||||||
Beginning inventory | |||||||||
+Purchase | |||||||||
+Purchase | |||||||||
(Less Cost of Goods Sold) | |||||||||
Ending Inventory FIFO | |||||||||
2 | LIFO Cost of Goods Sold - PERIODIC | ||||||||
Units Sold Taken From: | # of Units | Cost per Unit | Total Cost | ||||||
Total Cost of Goods Sold LIFO | |||||||||
LIFO Ending Inventory - PERIODIC | |||||||||
Inventory Available | # of Units | Cost per Unit | Total Cost | ||||||
Beginning inventory | |||||||||
+Purchase | |||||||||
+Purchase | |||||||||
(Less Cost of Goods Sold) | |||||||||
Ending Inventory LIFO | |||||||||
3 | Income Statement - Periodic Inventory Method | ||||||||
FIFO | LIFO | ||||||||
Sales revenue, net | 25,000 | 25,000 | |||||||
Cost of goods sold | |||||||||
Gross profit | |||||||||
Operating expenses | 8,000 | 8,000 | |||||||
Operating income before tax | |||||||||
Income tax expense | |||||||||
Net income | |||||||||