McQuire Company uses the periodic inventory method and had the following inventory information available: A physical count of inventory on December 31 revealed that there were 600 units on hand.
Instructions
Answer the following independent questions and show calculations supporting your answers.
a. Assume that the company uses the FIFO cost formula. The value of the ending inventory at December 31 is $__________.
b. Assume that the company uses the average cost formula. The value of the ending inventory on December 31 is $__________.
c. Determine the difference in the amount of income that the company would have reported if it had used FIFO instead of Average. Would income have been greater or less?

Question

McQuire Company uses the periodic inventory method and had the following inventory information available:  A physical count of inventory on December 31 revealed that there were 600 units on hand.
Instructions
Answer the following independent questions and show calculations supporting your answers. 
a. Assume that the company uses the FIFO cost formula. The value of the ending inventory at December 31 is $__________.
b. Assume that the company uses the average cost formula. The value of the ending inventory on December 31 is $__________.
c. Determine the difference in the amount of income that the company would have reported if it had used FIFO instead of Average. Would income have been greater or less?

Quizplus · Accepted Answer

The Answer of McQuire Company uses the periodic inventory method and had the following inventory information available:  A physical count of inventory on December 31 revealed that there were 600 units on hand.
Instructions
Answer the following independent questions and show calculations supporting your answers. 
a. Assume that the company uses the FIFO cost formula. The value of the ending inventory at December 31 is $__________.
b. Assume that the company uses the average cost formula. The value of the ending inventory on December 31 is $__________.
c. Determine the difference in the amount of income that the company would have reported if it had used FIFO instead of Average. Would income have been greater or less?

McQuire Company Uses the Periodic Inventory Method and Had the Following