E7-15 (Algo) Analyzing and Interpreting the Effects of the LIFO/FIFO Choice on Inventory Turnover Ratio LO7-5, 7-6 The records at the end of January of the current year for Young Company showed the following for a particular kind of merchandise: Beginning Inventory at FIFO: 18 Units @ $17 = $306 Beginning Inventory at LIFO: 18 Units @ $13 = $234 January Transactions Purchase, January 9 Purchase, January 20 Sale, January 21 (at $40 per unit) Sale, January 27 (at $41 per unit) Units 28 54 39 25 Unit Cost $15 20 Total Cost $ 420 1,080 Required: 1. Compute the inventory turnover ratio for the month of January under the FIFO and LIFO inventory costing methods. 2. Which costing method is the more accurate indicator of the efficiency of inventory management?
E7-15 (Algo) Analyzing and Interpreting the Effects of the LIFO/FIFO Choice on Inventory Turnover Ratio LO7-5, 7-6 The records at the end of January of the current year for Young Company showed the following for a particular kind of merchandise: Beginning Inventory at FIFO: 18 Units @ $17 = $306 Beginning Inventory at LIFO: 18 Units @ $13 = $234 January Transactions Purchase, January 9 Purchase, January 20 Sale, January 21 (at $40 per unit) Sale, January 27 (at $41 per unit) Units 28 54 39 25 Unit Cost $15 20 Total Cost $ 420 1,080 Required: 1. Compute the inventory turnover ratio for the month of January under the FIFO and LIFO inventory costing methods. 2. Which costing method is the more accurate indicator of the efficiency of inventory management?
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter13A: Perpetual Inventory Method: Lifo And Moving-average Methods
Section: Chapter Questions
Problem 2SPA: PERPETUAL: LIFO AND MOVING-AVERAGE Kelley Company began business on January 1, 20-1. Purchases and...
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