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

تمرين 16

Alternaiive Cost FlowAssumptions in aPeriodic System
Sea Travel sells motor boats.ne of Sea Travel's most popular models is the Wing.uring the current year, Sea Travel purchased 12 of these boats at the following costs:

On April 28, Sea Travel sold five Wings to the Jack Sport racing team.he remaining seven boats remained in inventory at June 30, the end ofSea Travel's fiscal year.
Assume that Sea Travel uses a periodic inventory system.Refer to the data that precede Problem 8.2B.)
Instructions
a.ompute the cost of goods sold relating to the sale on April 28 and the ending inventory of Wing boats at June 30, using the following cost flow assumptions:
1.verage cost (round cost to nearest whole dollar).
2.IFO.
3.IFO.
Show the number of units and the unit costs of each layer comprising the ending inventory.ou may determine the cost of goods sold by deducting ending inventory from the cost ofgoods available for sale.
b.f Sea Travel uses the LIFO cost flow assumption for income tax purposes, can it use the FIFO method for financial reporting purposes Explain.