Lecture 8 - Exercises - Question
Lecture 8 - Exercises - Question
Lecture 8 - Exercises - Question
1. You have the following information for Vincent Inc. for the month ended October 31,
2019. Vincent uses a periodic method for inventory.
(a) Calculate (i) ending inventory, (ii) cost of goods sold, (iii) gross profit, (iv) gross profit
rate under each of the following methods:
a) FIFO
b) Average-cost (Round cost per unit to three decimal places)
(b) Compare the results for the three cost flow assumptions.
2. Pember Inc. is a retailer operating in Edmonton, Alberta. Pember uses the perpetual
inventory method. You are provided with the following information for Pember Inc. for
the month of January 2019.
(a) Calculate (i) ending inventory, (ii) cost of goods sold, (iii) gross profit, under each of
the following methods:
a) FIFO
b) Moving-average (Round cost per unit to three decimal places)
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(b) Compare the results for the three cost flow assumptions.
Required:
(a) Calculate (i) ending inventory, (ii) cost of goods sold, under each of the following
methods:
i. FIFO
ii. Moving-average (Round cost per unit to three decimal places)
(b) Which costing method produces the highest ending inventory valuation?
Mawi Enteprise uses a perpetual inventory system. Opening inventories, purchases, and
sales data of Mawi Enterprise for 2019 are presented below:
Required:
(a) Calculate the cost of goods sold and the closing inventory using the following
inventory methods:
(i) First in First Out (FIFO); and
(ii) Weighted Average Costing (WAC).
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(b) Prepare the Income statement for the year ended 31 December 2019 using LIFO
inventory method.
Other expenses incurred and paid in cash during the year amounted to RM1,500
which consists of electricity and rental expense.