Question

The following sales and purchases of the same product were made during 20x1 at Yang Corporation....

The following sales and purchases of the same product were made during 20x1 at Yang Corporation. The opening inventory consisted of 50 units at $2 each.

Purchases Sales
Date Units $ per unit Date Units Unit $Price Total
March 15 200 3 April 25 250* 5
June 15 600 5 June 30 500** 6

*for specific identification, sold 50 units of opening inventory and 200 units of March 15 purchase

**for specific identification, sold 500 units of June 15 purchase

Requirements:

Calculate cost of goods sold and the cost of ending inventory under FIFO, LIFO, specific identification, and weighted average inventory cost flow assumptions. Use the student template #1

Prepare calculations comparing the effect on profit of the three inventory cost flow assumptions.

The president wants to maximize the company’s net income this year. Write a memo to your immediate supervisor suggesting which inventory method is recommended in accordance with Generally Accepted Accounting Principles (GAAP). Give reasons to support your recommendation.

Your memo should be at least one page and must include the title and reference pages. In addition, your paper must be formatted according to the CSU-Global Guide to Writing & APA. Submit Part 1 in the provided spreadsheet. Submit Parts 2 and 3 in one Word document.

Each assignment must include a title page and reference page. Review the grading rubric to understand how you will be graded on this assignment. Reach out to your instructor if you have questions about the assignment.

ACT300 Principles of Accounting I
Module 4: Critical Thinking Template Option #1
Purchased Sold Balance in inventory
Date Units Unit Cost Total Units Unit price Total Units Unit cost Total
FIFO
Beginning
25-Mar
25-Apr
15-Jun
30-Jun
Purchased Sold Balance in inventory
Date Units Unit Cost Total Units Unit price Total Units Unit cost Total
LIFO
Beginning
25-Mar
25-Apr
15-Jun
30-Jun
Purchased Sold Balance in inventory
Date Units Unit Cost Total Units Unit price Total Units Unit cost Total
Weighted Average
Beginning
25-Mar
25-Apr
15-Jun
30-Jun
Purchased Sold Balance in inventory
Date Units Unit Cost Total Units Unit price Total Units Unit cost Total
Specific Identification
Beginning
25-Mar
25-Apr
15-Jun
30-Jun

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