FIFO and LIFO accounting?

jeffersons copy center uses laser printers. assume jefferson started the year with 92 containers of ink (average cost of 9.00$ each, FIFO cost of 8.90$ each, LIFO, cost of 8.05$ each). during the year, jefferson purchased 680 containers of ink at 9.80$ and sold 580 units for 20.25$ each. jefferson paid operating expenses throughout the year, a total of 3,750$. jefferson is not subject to income tax.

i need to calculate J's net income for the current year ended december 31, under the average, fifo and lifo inventory costing methods

answer should be like:

net income:___________

fifo:_______________

lifo:______________

average:____________

thank you very much in advance and if you have any helpful sites, it could be helpful together with how you got the answers!

thanks in advance

1 Answer

Relevance
  • Don G
    Lv 7
    8 years ago
    Favorite Answer

    You need to learn how to compute Cost of Goods Sold under the 3 methods.

    Under FIFO, BB 92 @ 8.90 + 680 @ 9.80. Sold 580, of which 92 were @ 8.90 and the balance @ 9.80, leaving an EB of 192 @ 9.80.

    Under LIFO, BB 92 @ 8.05 + 680 @ 9.80. Sold 580, all from the 680 purchased @ 9.80. EB of 192 includes 100 @ 9.80 and 92 @ 8.05

    Under AVG, BB 92 @ 9.00 (828) + 680 @ 9.80 (6,664) = 7,492 / 772 for AVG 9.7047.

    Sold 580 at 9.7047, leaving EB of 192 @ 9.7047.

    Sales 580 @ 20.25, less Cost Of Goods Sold, as above, less Expenses of 3,750 = Net income

    Rather than looking for helpful sites, why not try reading your text book?

    • Login to reply the answers
Still have questions? Get your answers by asking now.