Which method results in the greater cash flow and why

Assignment Help Financial Accounting

Reference no: EM133433807

Inventory Data - June 1-30

June 1 Inventory 10 units @ $4.00

June 6 Purchase 10 units @ $6.00

June 13 Sale 12 units @ selling price of $10.00

June 20 Purchase 2 units @ $7.50

June 25 Sale 5 units @ selling price of $11.00

Required:

Calculate ending inventory, cost of goods sold and gross profit for each inventory method below (assuming a perpetual inventory system):

FIFO
LIFO

Please answer the following:

Which inventory method provides the highest profit and why?
Which method results in the greater cash flow and why?
Which method provides the best income statement matching and why?
Which method provides the better balance sheet valuation and why?
Is a LIFO liquidation occurring? If so, where is this occurring and how could it be avoided?

Reference no: EM133433807

Questions Cloud

What is the spot exchange rate : The one-year risk-free rate in the U.S. is 2.74 percent and the one-year risk-free rate in Mexico is 4.44 percent. The one-year forward rate between the Mexican

What impact will they have on the bop : Where will the following transactions be recorded on the U.S. Balance of Payments (account and subcategory) and what impact will they have on the BOP

How would a country correct an inflationary gap : How would a country correct an inflationary gap, using changes in government spending? By increasing government spending by an amount equal to the inflationary

Compute the value of the retirement home and jimmy and jane : compute the value of the retirement home and Jimmy and Jane's current home when they wants to retire in 35 years.

Which method results in the greater cash flow and why : Calculate ending inventory, cost of goods sold and gross profit for each inventory method below (assuming a perpetual inventory system)

Explain the difference between cash and accrual-based : Explain the difference between cash and accrual-based accounting. Furthermore, take one expense from your personal life and explain how both methods

What is the minimum withdrawal that she must make from her : her portfolio was valued at $170,000 on March 2nd 2022. Based on Elle's age, what is the minimum withdrawal that she must make from her RRIF

Evaluate projects which project should the company prefer : evaluate the projects, which project should the company prefer? Explain your answer using relevant IRR calculations

What name is given to this measurement : An economics professor is discussing a measure of trade that involves a comparison of exports and imports of goods for the year just ended. What name is given

User Account

All Pages