Diaz Company's first year in operation was Year 1. For Year 1, its cost of goods sold using FIFO was $240,000, and its ending inventory was $58,400. If Diaz had used the LIFO cost flow method, its ending inventory would have been $56,000. Required: a) What would the cost of goods sold have been with LIFO? b) Based on this information, was Year 1 a period of rising inventory prices or falling inventory prices?
What will be an ideal response?
a) $242,400
b) Year 1 must have been a year of rising inventory prices because LIFO gives a lower ending inventory and higher cost of goods sold than FIFO.
a)
Cost of goods available for sale = $240,000 + 58,400 = $298,400
Cost of goods sold = $298,400 ? 56,000 = $242,400
You might also like to view...
The_________principle attempts to associate with the revenue of the period, all costs necessary to generate that revenue
Fill in the blank(s) with correct word
The following code fragment is a correct example of the use of a basic loop.BEGIN LOOP DBMS_OUTPUT.PUT_LINE( lv_cnt_num ); lv_cnt_num := lv_cnt_num + 1; END LOOP;END;
Answer the following statement true (T) or false (F)
In the national organization Toastmasters, members are required to speak on a regular basis. In one situation, a member pulls a topic from a hat, spends a few minutes preparing, and then gives a 3-5 minute presentation on the topic. What kind of delivery is this?
a. Memorized b. Scripted c. Written-and-read d. Impromptu
In the Womco, Inc v. Navistar International Corporation case, the court stated the disclaimer of the warranty of:
a. merchantability must be written and mention the word "merchantability.". b. merchantability may be oral. c. fitness for a particular purpose may be oral or written. d. merchantability or fitness for a particular purpose must be conspicuous, which requires that the disclaimer be in a larger type and a different color.