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LIFO, FIFO ,Average cost method,

Questions 64-65 and 66-68

Use the following information for questions 64-65.

The income statement and balance sheet columns of Grant Company's work sheet reflects the following totals:

Income Statement Balance Sheet
Dr. Cr. Dr. Cr.
Totals $58,000 $50,000 $34,000 $42,000

64. The net income (or loss) for the period is
a. $50,000 income.
b. $ 8,000 income.
c. $ 8,000 loss.
d. not determinable.

65. To enter the net income (or loss) for the period into the above work sheet requires an entry to the
a. income statement debit column and the balance sheet credit column.
b. income statement credit column and to the balance sheet debit column.
c. income statement debit column and the income statement credit column.
d. balance sheet debit column and to the balance sheet credit column.
Use the following information for questions 66-68.

A company just starting business made the following four inventory purchases in June:
June 1 150 units $ 750
June 10 200 units 1,200
June 15 200 units 1,260
June 28 150 units 990
$ 4,200

A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand.

66. Using the LIFO inventory method, the value of the ending inventory on June 30 is
a. $1,350.
b. $1,620.
c. $2,580.
d. $2,850.

67. Using the FIFO inventory method, the amount allocated to cost of goods sold for June is
a. $1,620.
b. $1,350.
c. $2,580.
d. $2,850.

68. Using the average cost method, the amount allocated to the ending inventory on June 30 is
a. $4,200.
b. $2,700.
c. $1,495.
d. $1,500.

Solution Preview

Hi,
Please see the response to your posting as below:
The income statement and balance sheet columns of Grant Company's work sheet reflects the following totals:

Income Statement Balance Sheet
Dr. Cr. Dr. Cr.
Totals $58,000 $50,000 $34,000 $42,000

64. The net income (or loss) for the period is
a. $50,000 income.
b. $ 8,000 income.
c. $ 8,000 loss.
d. Not determinable.

Answer:
c. $ 8,000 loss.
(Income statement Cr. Balance (Revenue) - Income statement Dr. Balance (Expenses) =$50000 -$58000 =-$8000 =Net loss of $8000)

65. To enter ...

Solution Summary

Solution contains valuation of inventory and cost of goods sold.

$2.19