Business, 03.07.2021 03:30 claudia122752

The management of Felipe Inc. is reevaluating the appropriateness of using its present inventory cost flow method, which is average-cost. The company requests your help in determining the results of operations for 2020 if either the FIFO or the LIFO method had been used. For 2020, the accounting records show these data:

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Answer from: roseemariehunter12

Question Completion:

Inventories:

Beginning 9,940 units $19,880

Ending 24,140 units

Total net Sales (255,600 units) $1,060,740

Cost of goods purchased (269,800 units) $867,620

Quarterly Purchases:

Quarters Units Unit Costs Total Costs

1 71,000 $2.98 $211,580

2 56,800 3.10 176,080

3 56,800 3.26 185,168

4 85,200 3.46 294,792

Felipe Inc.

Income Statement for the year ended December 31, 2020:

FIFO LIFO

Sales Revenue $1,060,740 $1,060,740

Cost of goods sold 803,976 825,304

Operating results $256,764 $235,436

Explanation:

a) Data and Calculations:

Quarters Units Unit Costs Total Costs

Beginning 9,940 $2.00 $19,880

1 71,000 $2.98 211,580

2 56,800 3.10 176,080

3 56,800 3.26 185,168

4 85,200 3.46 294,792

Total 279,740 $887,500

Units sold 255,600

Ending inventory = 24,140 (279,740 - 255,600)

FIFO:

Cost of goods sold

= Cost of goods available for sale - Ending inventory

= $803,975.60 ($887,500 - $83,524.40)

Ending Inventory:

= $83,524.40 (24,140 * $3.46)

LIFO:

Cost of goods sold

= Cost of goods available for sale - Ending inventory

= $825,304 ($887,500 - $62,196)

Ending Inventory:

= (9,940 * $2.00) + (14,200 * $2.98)

= ($19,880 + $42,316)

= $62,196

Answer from: Quest

The correct answer is "b) net income overstated, assets unaffected, liabilities understated, and owner's equity overstated."

Answer from: Quest

the correct answer is d. wealthy colonists to take care of the less fortunate. hope this

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The management of Felipe Inc. is reevaluating the appropriateness of using its present inventory cos...

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