|
Units
|
Unit Cost
|
Total Cost
|
|
|
Beginning Inventory
|
160,000
|
$2,00
|
|
|
Purchase #1
|
60,000
|
$2.25
|
|
|
Purchase #2
|
60,000
|
$1.90
|
|
|
Ending Inventory
|
30,000
|
|
|
|
Replacement cost on market
|
|
$2.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. Complete the following table ALL CALCULATIONS must be indicated via EXCEL formulas
|
|
|
|
Method:
|
Ending Inventory:$
|
COGS:$
|
|
FIFO
|
|
|
|
LIFO
|
|
|
|
Average Cost
|
|
|
3. Which Inventory method you recommend for reporting for income tax purposes? why?
4. The company is operating in an inflationary environment. Which method should the company use to maximize inventory valuation? why?
5,Should the replacement cost be used to value the ending inventory for any of the methods? Why?