Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

تمرين 47

Assume that Speed World Cycles uses a perpetual inventory system.See the data given above.)
Instructions
a.ompute the cost of goods sold relating to the sale on July 28 and the ending inventory of Kazomma 900 dirt bikes at September 30, using the following cost flow assumptions:
1.verage cost.
2.IFO.
3.IFO.
Show the number of units and the unit costs of each layer comprising the cost of goods sold and ending inventory.
b.sing the cost figures computed in part a, answer the following questions:
1.hich of the three cost flow assumptions will result in Speed World Cycles reporting the highest net income for the current year Would this always be the case Explain.
2.hich of the three cost flow assumptions minimizes the income taxes owed by Speed World Cycles for the year Would you expect this usually to be the case Explain.
3.ay Speed World Cycles use the cost flow assumption that results in the highest net income for the current year in its financial statements, but use the cost flow assumption that minimizes taxable income for the current year in its income tax return Explain.