Alto Ltd. uses the periodic inventory system and had the following inventory information available: A physical count of inventory on December 31 showed that there were 700 units on hand.InstructionsAnswer the following independent questions and show calculations supporting your answers.
a. Assume that the company uses FIFO. The value of the ending inventory at December 31 is $__________.
b. Assume that the company uses average cost. The value of the ending inventory on December 31 is $__________.
c. Determine the difference in the amount of net income that the company would have reported if it had used FIFO instead of average cost. Would net income have been greater or less?

Question

Alto Ltd. uses the periodic inventory system and had the following inventory information available:  A physical count of inventory on December 31 showed that there were 700 units on hand.InstructionsAnswer the following independent questions and show calculations supporting your answers. 
a. Assume that the company uses FIFO. The value of the ending inventory at December 31 is $__________.
b. Assume that the company uses average cost. The value of the ending inventory on December 31 is $__________.
c. Determine the difference in the amount of net income that the company would have reported if it had used FIFO instead of average cost. Would net income have been greater or less?

Quizplus · Accepted Answer

The Answer of Alto Ltd. uses the periodic inventory system and had the following inventory information available:  A physical count of inventory on December 31 showed that there were 700 units on hand.InstructionsAnswer the following independent questions and show calculations supporting your answers. 
a. Assume that the company uses FIFO. The value of the ending inventory at December 31 is $__________.
b. Assume that the company uses average cost. The value of the ending inventory on December 31 is $__________.
c. Determine the difference in the amount of net income that the company would have reported if it had used FIFO instead of average cost. Would net income have been greater or less?

Alto Ltd Uses the Periodic Inventory System and Had the Following