Download file to see previous pages...
In our current case however, the FIFO method will result in higher profits due to the fact that the older inventory was at held at a lower cost. The new inventory costs more, due to which the Cost of Goods Sold goes up in the LIFO method. However, when we talk to about meaningful profits, then I would say that the LIFO method is more relevant. This is because FIFO results in "inventory profits"; profits that arise merely from holding inventory; and fails to provide the best matching of costs and revenues. Thus in terms of more meaningful profit, I would say that LIFO is more meaningful as it depicts a better matching better revenues and costs.
FIFO is the costing method which depicts a better approximation of actual physical flow of goods. This is because companies generally use the oldest items in inventory first so they can continually roll the stock and prevent deterioration or obsolescence. Furthermore, it’s a matter of common sense that inventory bought in the last quarter cannot be used in the first three quarters, thus the physical flow of goods initiates from the inventory in hand at the beginning.
There will be more cash available for the management under the FIFO method and not the LIFO method. The exact amount which would be available to the management based on the income statements generated would be $5,100. This is due to the fact that in FIFO, the cost of goods is lesser, resulting in greater profits. In the LIFO method, the cost of inventory is much higher, and thus our profits shrink. The assumption that is being made here is that the net profit after taxation is the cash which is available for the management. As the income statements in Part A prove, FIFO would provide more cash rather than LIFO.
The gross profit will be lower in the average cost method when compared to the FIFO method because average cost method accounts for the expensive inventory as well as the cheaper inventory. Likewise,
...Download file to see next pagesRead More
Accounting Companies should be required to use the same accounting method for inventory. That would ensure that there is no exploitation of the customers because of the inventory methods that are been used by companies. The other advantage of that is the fact that there will be uniformity in the reporting of financial statements by the various companies.
Part I a) b) c) d) In ACTG 381, 382, and 383 my grades were _____ . I believe that I am an excellent accountant. I always comply with the generally accepted accounting principle. To me satisfying the needs of the customer is a top priority. As an accountant it is my duty to always give a maximum effort in order to complete the tasks at hand on time.
Initially the company was formed with a view to help customers save on their purchase. Over time, this has become the underlying business philosophy of the company that has earned a global brandname for itself.
Walmart Inc. is listed on the NYSE from
On January 10, Mary Dawes uses her Pierson Co. credit card to purchase merchandise from Pierson Co. for $9,000. On February 10, Dawes is billed for the amount due of $9,000. On February 12, Dawes pays $5,000 on the balance due. On March
Securities & Exchange Commission.” The Staff Notice 51-333 gives a detailed guide and sample disclosure provisions unlike in the past when CSA responded to boilerplate with general requests to environmental disclosure. The Staff Notice 51-333 discusses
In addition, they were to be supervised even after for a period of three years upon their release. The two were convicted of wire fraud and conspiracy on 19 November 2012. They had had actively participated underground in misusing the financial assets of
In Brooklyn New York where the company started, Ameritel had a single store in 1996. However, today it has expanded to one of the America most influential national wireless providers and retail partner.
Ameritel gives priority to business partner connection, field
From a social point of view, it is the hopes of the relevant authorities that many people if not all are beneficiaries of these advances in health care system. However, healthcare is not only a social or scientific issue; it is also an economic
The company automates parts of the general production line. The packaging stage in the production line is run by the programmed machines, which are relatively faster and efficient. Grow sales enhance the development of new markets for
The variable cost that the company experiences include oil transportation and oil storage cost that may change with the changes in productivity. The mixed cost of the business will be the contractual workers and the utility payments that
2 Pages(500 words)Assignment
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Assignment on topic Accounting for FREE!