Solved by verified expert :Clarke Company uses the periodic inventory method and had the
following inventory information available:
Units
Unit Cost
Total Cost
1-Jan
Beginning Inventory
100
$4
$400
20-Jan
Purchase
400
$5
$2,000
25-Jul
Purchase
200
$7
$1,400
20-Oct
Purchase
300
$8
$2,400
total
1000
$6,200
A Physical
count of inventory on December 31 revealed that there were 400 units on hand.
Answer the
following independent questions and show computations supporting your
answers:
1
Assume that the company uses FIFO
method. That Value of the ending inventory at December 21 is:
2
Assume that the company uses
Average-Cost method. That Value of the ending inventory at December 21 is:
3
Assume that the company uses LIFO
method. That Value of the ending inventory at December 21 is:
4
Determine the difference in the
amount of income that the company would have reported if it had used the
FIFO method instead of the LIFO
method. Would income have been greater or less?
