McGuire Metals Ltd uses the periodic inventory method and had the following inventory information available:
A physical count of inventory on 31 December revealed that there were 350 units on hand.
Answer the following independent questions and show computations supporting your answers.
1. Assume that the company uses the FIFO method. The value of the ending inventory at 31 December is $__________.
2. Assume that the company uses the average cost method. The value of the ending inventory on 31 December is $__________.
3. Assume that the company uses the LIFO method. The value of the ending inventory on 31 December is $__________.
4. Determine the difference in the amount of income that the company would have reported if it had used the FIFO method instead of the LIFO method. Would income have been greater or less?

Question

McGuire Metals Ltd uses the periodic inventory method and had the following inventory information available:
  A physical count of inventory on 31 December revealed that there were 350 units on hand.
Answer the following independent questions and show computations supporting your answers.
1. Assume that the company uses the FIFO method. The value of the ending inventory at 31 December is $__________.
2. Assume that the company uses the average cost method. The value of the ending inventory on 31 December is $__________.
3. Assume that the company uses the LIFO method. The value of the ending inventory on 31 December is $__________.
4. Determine the difference in the amount of income that the company would have reported if it had used the FIFO method instead of the LIFO method. Would income have been greater or less?

Quizplus · Accepted Answer

The Answer of McGuire Metals Ltd uses the periodic inventory method and had the following inventory information available:
  A physical count of inventory on 31 December revealed that there were 350 units on hand.
Answer the following independent questions and show computations supporting your answers.
1. Assume that the company uses the FIFO method. The value of the ending inventory at 31 December is $__________.
2. Assume that the company uses the average cost method. The value of the ending inventory on 31 December is $__________.
3. Assume that the company uses the LIFO method. The value of the ending inventory on 31 December is $__________.
4. Determine the difference in the amount of income that the company would have reported if it had used the FIFO method instead of the LIFO method. Would income have been greater or less?

McGuire Metals Ltd Uses the Periodic Inventory Method and Had