On Jan 1, Bike Mart had a beginning inventory of 20 bicycles which it purchased...
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Accounting
On Jan 1, Bike Mart had a beginning inventory of 20 bicycles which it purchased for $365 each.
During January, the company purchases four more bicycles for $400 each. None were sold in January.
On February 15, the company purchases five more bicycles for $450 each.
Between February 16 and 28, Bike Mart sells 10 of these bicycles.
a.) Calculate Bike Marts Ending Inventory Balance (in dollars) at the end of February and Cost of Goods Sold through February using the FIFO Method. (show all work.)
b.) Calculate Bike Marts Ending Inventory Balance (in dollars) at the end of February and Cost of Goods Sold through February using the Weighted Average Method. (show all work.)
c.) At the end of February, will Bike Marts Net Income (profits) on its Income Statement be higher if it uses the FIFO or Weighted Average Inventory Method? Why?
e.) At the end of February, will Bike Marts Inventory Turnover Ratio be higher if it uses the FIFO or Weighted Average Inventory Method? Why?
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