Inventory Costing Methods—Perpetual System (Appendix) The following information is available… 1 answer below »

Inventory Costing Methods—Perpetual System (Appendix) The following information is available… 1 answer below »

Inventory Costing Methods—Perpetual System (Appendix)

The following information is available concerning Stillwater Inc.:

Stillwater, which uses a perpetual system, sold 1,000 units for $22 each during the year. Sales occurred on the following dates:

Required

1. Calculate ending inventory and cost of goods sold for each of the following three methods:

a. Moving average

b. FIFO

c. LIFO

2. For each of the three methods, compare the results with those of Carter in Exercise 5-22. Which

method gives a different answer depending on whether a company uses a periodic or a perpetual

inventory system?

3. Assume the use of the perpetual system and an estimated tax rate of 30%. How much more or less

(indicate which) will Stillwater pay in taxes by using LIFO instead of FIFO? Explain your answer.

 

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