Principles of Accounting

Price: $10 USD

Question description

Flying Tomato sells a snowboard, WhiteOut, that is popular with snowboard enthusiasts. Presented

below is information relating to Flying Tomato’s purchases of WhiteOut snowboards during September.

During the same month, 121 WhiteOut snowboards were sold at $170 each. Flying Tomato uses a

periodic inventory system.

Date Explanation Units Unit Cost Total Cost

Sept. 1 Inventory 25 $ 100 $ 2,500

Sept. 12 Purchases 45 106 4,770

Sept. 19 Purchases 24 110 2,640

Sept. 26 Purchases 50 112 5,600

Totals 144 $ 15,510


(a) Compute the ending inventory at September 30 and cost of goods sold using the FIFO and LIFO

methods. Prove the amount allocated to cost of goods sold under each method.

(b) For both FIFO and LIFO, calculate the sum of ending inventory and cost of goods sold. What do you

notice about the answers you found for each method?

(c) What is gross profit under each method?

(d) Which method results in a larger amount reported for assets on the balance sheet? Which results in

a larger amount reported for owner’s equity on the balance sheet?

Tutor Answer

(Top Tutor) Daniel C.
School: University of Virginia
Studypool has helped 1,244,100 students
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1822 tutors are online

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors