Question Details

Purdy Company is in the electronics industry 



1
Wang Company reports the following for the month of June.

Units	Unit Cost	Total Cost
June 1  Inventory	300	¥500	¥150,000
12  Purchase	450	600	270,000
23  Purchase	750	700	525,000
30  Inventory	180

Instructions
(a)	Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO and a(2) LIFO.
(b)	Compute the cost of the ending inventory and the cost of goods sold using the average-cost method.




2
Purdy Company is in the electronics industry and the price it pays for inventory is decreasing.  Instructions Indicate which inventory method will: a.	provide the lowest ending inventory. b.	provide the highest cost of goods sold. c.	result in the highest net income. d.	result in the lowest income tax expense. e.	produce the most stable earnings over several years. 




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