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

تمرين 12

Alternative Cost Flow Assumptions in a Periodic System
Assume that Speed World Cycles sells high-performance motorcycles and motocross racers.ne of Speed World's most popular models is the Kazomma 900 dirt bike.uring the current year, Speed World purchased eight of these cycles at the following costs:

On Jul y 28, Speed World sold four Kazomma 900 dirt bikes to the Vince Wilson racing team.The remaining four bikes remained in inventory at September 30, the end of Speed World's fiscal year.
Assume that Speed World uses a periodic inventory system.See the data given before Problem 8.2A.)
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 unit costs in each cost layer of the ending inventory.ou may determine the cost of goods sold by deducting ending inventory from the cost of goods available for sale.
b.f Speed World Cycles uses the LIFO cost flow assumption for financial reporting purposes, can it use the FIFO method for income tax purposes Explain.