Southwood Motors is considering which inventory costing method it should use. The business wants to maximize gross profit during a period of rising costs. Which inventory method should Southwood select? Discuss your selection.
What will be an ideal response?
Southwood should select the first-in, first-out inventory costing method (FIFO). Under FIFO, the ending inventory consists of the most recent cost. Cost of goods sold consists of the oldest costs. Cost of goods sold will reflect the lower costs and will cause gross profit and net income to be higher than computations using LIFO or weighted-average.
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An advertising objective to stimulate more usage of a product is appropriate under which of the following conditions?
A) The advertised product belongs to a nascent product category. B) The company is not the market leader. C) The advertised brand is superior to the market leader. D) The product class is mature. E) Brand usage for the product is very high.
Which of the following is a feature of traditional "conversations" from organizations' websites?
A) The content on these websites is created by users. B) They provide tools to rate or air opinions about their products. C) They allow no convenient means of engaging in a conversation about any topic. D) They employ a many-to-many model of conversation.
Which of the following is correct with regard to a contract entered into with a third person by an agent of an undisclosed principal?
a. The agent has no liability to the third person if the agent has acted within the scope of her authority. b. The agent is personally liable upon the contract. c. The undisclosed principal has no liability on the contract, even if her existence and identity are discovered by the third person. d. If the third party obtains a judgment against the principal and the judgment is satisfied, the agent may still have liability to that third party.
Salsedo Corporation's balance sheet and income statement appear below:Comparative Balance Sheet Ending BalanceBeginning BalanceAssets: Cash and cash equivalents$31 $33 Accounts receivable 24 30 Inventory 53 47 Property, plant, and equipment 461 390 Less accumulated depreciation 306 256 Total assets$263 $244 Liabilities and stockholders' equity: Accounts payable$42 $49 Accrued liabilities 16 17 Income taxes payable 39 40 Bonds payable 75 90 Common stock 53 50 Retained earnings 38 ( 2)Total liabilities and stockholders' equity$263 $244 Income StatementSales$ 634Cost of goods sold 400Gross margin234Selling and administrative expense 174Net operating income60Gain on sale of equipment 10Income before
taxes70Income taxes 21Net income$ 49Cash dividends were $9. The company sold equipment for $15 that was originally purchased for $10 and that had accumulated depreciation of $5. It did not issue any bonds payable or repurchase any of its own common stock.The net cash provided by (used in) operating activities for the year was: A. $85 B. $94 C. $60 D. $95