Question

Ontario, Inc.'s inventory records for a particular development program show the following at December 31: At December 31, 11 of these programs are on hand. Requirements 1. Compute cost of goods sold and ending inventory, using each of the following methods: a. Specific unit cost, with seven $170 units and four $180 units still on hand at the end b. Average cost c. First-in, first-out d. Last-in, first-out 2. Which method produces the highest cost of goods sold? Which method produces the lowest cost of goods sold? What causes the difference in cost of goods sold? Requirement 1. Compute cost of goods sold and ending inventory, using each of the following four inventory methods: Begin by entering the number of units sold and number of units in ending inventory. Then calculate cost of goods sold and ending inventory using (a) specific unit cost, then (b) average cost, then (c) FIFO, and finally (d) LIFO. (Round the average cost per unit to the nearest cent. Round all final answers to the nearest whole dollar.) Number of units Cost of goods sold Ending inventory Data Table Dec 1 Beginning inventory ... 8 units @ $ 170 = $ 1,360 15 Purchase ........... 5 units @ 171 = $ 855 26 Purchase ........... 12 units @ 180 = $ 2,160 E6-20A (similar to) Big Fish, Inc.'s inventory records for a particular development program show the following at March 31: At March 31, 11 of these programs are on hand. Big Fish, Inc. calculated its cost of goods sold using LIFO as $3,024 and its cost of goods sold using FIFO as $2,915. Requirement 1. Sales revenue is $10,080, operating expenses are $1,600, and the income tax rate is 35%. How much in taxes would Big Fish, Inc., save by using the LIFO method versus FIFO? (Round your answer to the nearest whole dollar.) Data Table Difference in methods x Income tax rate Tax savings using LIFO Mar 1 Beginning inventory .... 10 units @ $ 160 = $ 1,600 15 Purchase ........... 5 units @ 161 = $ 805 26 Purchase ........... 14 units @ 170 = $ 2,380

Ontario, Inc.'s inventory records for a particular development program show the following at December 31:
At December 31, 11 of these programs are on hand.
Requirements
1. Compute cost of goods sold and ending inventory, using each of the following methods:
a. Specific unit cost, with seven $170 units and four $180 units still on hand at the end
b. Average cost
c. First-in, first-out
d. Last-in, first-out
2. Which method produces the highest cost of goods sold? Which method produces the lowest cost of goods sold? What causes the difference in cost of goods sold?
Requirement 1. Compute cost of goods sold and ending inventory, using each of the following four inventory methods:
Begin by entering the number of units sold and number of units in ending inventory. Then calculate cost of goods sold and ending inventory using (a) specific unit cost, then (b) average cost, then (c) FIFO, and finally (d) LIFO. (Round the average cost per unit to the nearest cent. Round all final answers to the nearest whole dollar.)
Number of units
Cost of goods sold
Ending inventory
Data Table
Dec 1 Beginning inventory ... 8 units @ $ 170 = $ 1,360
15 Purchase ........... 5 units @ 171 = $ 855
26 Purchase ........... 12 units @ 180 = $ 2,160
E6-20A (similar to)
Big Fish, Inc.'s inventory records for a particular development program show the following at March 31:
At March 31, 11 of these programs are on hand. Big Fish, Inc. calculated its cost of goods sold using LIFO as $3,024 and its cost of goods sold using FIFO as $2,915.
Requirement
1. Sales revenue is $10,080, operating expenses are $1,600, and the income tax rate is 35%. How much in taxes would Big Fish, Inc., save by using the LIFO method versus FIFO? (Round your answer to the nearest whole dollar.)
Data Table
Difference in methods
x Income tax rate
Tax savings using LIFO
Mar 1 Beginning inventory .... 10 units @ $ 160 = $ 1,600
15 Purchase ........... 5 units @ 161 = $ 805
26 Purchase ........... 14 units @ 170 = $ 2,380

Added by John W.

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