Solution-Compute the cost of goods sold for june

Compute the cost of goods sold for june

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Reference no: EM132882755

Problem - Alternative Inventory Methods - Park Company's perpetual inventory records indicate the following transactions in the month of June:

	Units	Cost/Unit
Inventory, June 1	200	$3.20
Purchases:
June 3	200	3.50
June 17	250	3.60
June 24	300	3.65
Sales:
June 6	300
June 21	200
June 27	150

Required -

1. Compute the cost of goods sold for June and the inventory at the end of June using each of the following cost flow assumptions:

a. FIFO

b. LIFO

c. Average cost (Round unit costs to 3 decimal places and other amounts to the nearest dollar.)

2. Why are the cost of goods sold and ending inventory amounts different for each of the three methods? What do these amounts tell us about the purchase price of inventory during the year?

3. Which method produces the most realistic amount for net income? For inventory? Explain your answer.

4. If Park uses IFRS, which of the previous alternatives would be acceptable and why?

Reference no: EM132882755

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Compute the cost of goods sold for june

Reference no: EM132882755

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