Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. a firm is assumed to use perpetual system which se

A firm is assumed to use perpetual system which separately determined inventory under FIFO and LIFO...

70.2K

Verified Solution

Question

Accounting

  1. A firm is assumed to use perpetual system which separatelydetermined inventory under FIFO and LIFO and then compare theresults.

i) In each space below, place thecorrect sign (< / > / =) for each comparison by assumingperiods of rising prices.

a. FIFO supplies                    ____________ LIFO supplies

b. FIFO cost of sales            ____________ LIFO cost of sales

c. FIFO net profit                  ____________ LIFO net profit

d. FIFO taxableincome        ____________ LIFOtaxable income

ii) Why the use of LIFO is morepreferable by a management compared to FIFO in period of risingprices?

(5)

(Total: 15 marks)

Answer & Explanation Solved by verified expert
3.6 Ratings (294 Votes)
i In a situation of rising prices the cost of inventory latest purchased would be higher as compared to the cost of inventory purchased earlier As a result the cost supplies under FIFO    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

What programs are available to support the aging population and address end of life issues? Why do...

Psychology
Q

17 When at rest a liquid stands at the same level in the tubes shown...

Physics
Q

9 A particle of mass m moving with horizontal speed 6 m s collides elastically...

Physics
Q

Write as a trinomial in simplest form:(4y - 51)2

Basic Math
Q

My Corporation issued 50,000 preference shares of P100 par value for P5,000,000 with 50,000 warrants...

Accounting
Q

RootSystems manufactures an optical switch that it uses in its final product. RootSystems incurred the...

Accounting
Q

You have just been hired as a new management trainee by Earrings Unlimited, a distributor...

Accounting
Q

To be useful to management accountants for planning and predictive purposes, mixed costs: a Must...

Accounting
Q

Assume the company uses three inventory pools instead of one. Compute the ending inventory, cost...

Accounting
Q

Kaylee James, a connoisseur of fine chocolate, opened Kaylee's Sweets in Collegetown on February 1....

Accounting
Q

Prospect Realty Co. pays weekly salaries of $9,570 on Monday for a six-day workweek ending...

Accounting
Q

Margie has come to you and told you that she is considering executing a power...

Finance