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    natalya80's Avatar
    natalya80 Posts: 2, Reputation: 1
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    #1

    Mar 8, 2009, 08:53 AM
    Operating Activities
    The following Information regarding inventory transactions is available for the moth of May.

    Date Type of Event Number of Units Unit Cost Total Cost
    May 1 Beginning Inventory 100 $12 $1,200
    May 3 Purchase 50 $14 $700
    May 12 Sale 70
    May 15 Sale 60
    May 20 Purchase 100 $15 $1,500
    May 28 Sale 60


    Determine the correct balances at May 31 for Merchandise Inventory and Cost of Gods Sold under each of the following inventory methods: (a) Periodic FIFO, (b) periodic LIFO, and (c) weighted-average.
    natalya80's Avatar
    natalya80 Posts: 2, Reputation: 1
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    #2

    Mar 8, 2009, 09:03 AM
    Operating Activities II
    Explain whether each of the following would be expensed on the income statement in 2007 or in some later year, and why.

    a. Inventory purchased in 2007 but sold in 2008

    b. Estimated warranty cost for goods sold in 2007; the warranty servicing will take place in 2008 and 2009.

    c. Bad debts caused by 2007 sales; the actual bad receivable will not be identified until a later year.

    d. Research development cost incurred in 2007 but aimed at producing a better product in later years.
    Curlyben's Avatar
    Curlyben Posts: 18,514, Reputation: 1860
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    #3

    Mar 8, 2009, 09:16 AM
    Thank you for taking the time to copy your homework to AMHD.
    Please refer to this announcement: Ask Me Help Desk - Announcements in Forum : Homework Help
    virgol72's Avatar
    virgol72 Posts: 3, Reputation: 1
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    #4

    Mar 9, 2009, 10:44 AM

    Natalya,
    I want you to know what FIFo, LIFO and weighted Average means in the first place before you start to do your work.
    FIFO is first in first out. And periodic inventory method is the method that uses physical count at the end of the year and not at the end of the period like perpertual. So there is no cost of goods sold under periodic. Whenever you see periodic, think about purchases and perpertual inventory, that's when cogs comes in.
    So in periodic fifo, you start with your beg. Inv. And the cost and find your total. You will have to make a chart of accts. Like date, transaction, cogs and ending inv that is the balanc sheet products.
    From the beg. Inv and on may 5, purch. 50 @14 and sold 70, the first in first out method, you take the 70 that was sold from your beg. Inv because its fifo at the unit cost of 12, and you will left with 30 units actually from your beg. Inv. On that first shelf. Before you move down to the second shelf if the first shelf is empty according to fifo rule. I hope I help you a little and good luck in your studies.

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