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    Module 7 - Additional Practice - With Solution

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    Anish Adhikari
    The document summarizes the effect of using different inventory costing methods, FIFO and weighted average, on a company's financial statements. It provides two scenarios for Alpha Company and indicates for each scenario whether FIFO or weighted average would result in a higher cost of goods sold, profit, or ending inventory value. FIFO typically results in a higher ending inventory value and profit, while weighted average typically results in a higher cost of goods sold. The document is an educational tool comparing inventory costing methods.

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    Module 7 - Additional Practice - With Solution

    Uploaded by

    Anish Adhikari
    8 views1 page
    The document summarizes the effect of using different inventory costing methods, FIFO and weighted average, on a company's financial statements. It provides two scenarios for Alpha Company and indicates for each scenario whether FIFO or weighted average would result in a higher cost of goods sold, profit, or ending inventory value. FIFO typically results in a higher ending inventory value and profit, while weighted average typically results in a higher cost of goods sold. The document is an educational tool comparing inventory costing methods.

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    The document summarizes the effect of using different inventory costing methods, FIFO and weighted average, on a company's financial statements. It provides two scenarios for Alpha Company and indicates for each scenario whether FIFO or weighted average would result in a higher cost of goods sold, profit, or ending inventory value. FIFO typically results in a higher ending inventory value and profit, while weighted average typically results in a higher cost of goods sold. The document is an educational tool comparing inventory costing methods.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    8 views1 page

    Module 7 - Additional Practice - With Solution

    Uploaded by

    Anish Adhikari
    The document summarizes the effect of using different inventory costing methods, FIFO and weighted average, on a company's financial statements. It provides two scenarios for Alpha Company and indicates for each scenario whether FIFO or weighted average would result in a higher cost of goods sold, profit, or ending inventory value. FIFO typically results in a higher ending inventory value and profit, while weighted average typically results in a higher cost of goods sold. The document is an educational tool comparing inventory costing methods.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    ACCT 2210 Module 7 – Class Presentation – Solution

    See slides posted on Moodle if not clear on this subject.

    For each of the scenarios below indicate (use  in the appropriate box):
     Under which method (FIFO, Weighted Average) will the company report higher Cost of
    Goods Sold?
     Under which method will the company report higher profit?
     Under which method will the company report higher inventory value on the statement of
    financial position?

    Alpha Company recorded the following inventory transactions in the month of March, 2015:

    Date: Cost /unit


    March 5 - purchase $ 168
    March 15 - purchase $ 170
    March 26 - purchase $ 200

    FIFO Weighted Average


    Higher Ending Inventory x

    Higher Cost of Goods x


    Sold
    Higher Profit x

    Alpha Company recorded the following inventory transactions in the month of June, 2015:

    Date: Cost /unit


    June 5 - purchase $ 200
    June 10 - purchase $ 155
    June 26 - purchase $ 112

    FIFO Weighted Average


    Higher Ending Inventory x

    Higher Cost of Goods x


    Sold
    Higher Profit x

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