Shanrock Company Uses the Periodic Inventory Method and Had the Following

question 137

Essay

Shanrock Company uses the periodic inventory method and had the following inventory information available:
A physical count of inventory on December 31 revealed that there were 400 units on hand.
Instructions
Answer the following independent questions and show computations supporting your answers.
1. Assume that the company uses the FIFO method. The value of the ending inventory at December 31 is $__________.
2. Assume that the company uses the Average-Cost method. The value of the ending inventory on December 31 is $__________.
3. Assume that the company uses the LIFO method. The value of the ending inventory on December 31 is $__________.
4. Determine the difference in the amount of income that the company would have reported if it had used the FIFO method instead of the LIFO method. Would income have been greater or less?

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Definitions:

Marketing Strategy

A long-term plan designed to achieve a company's marketing goals by understanding customer needs and creating a clear positioning for the product or service.

Economic Trends

The general direction in which an economy is moving, based on statistical measures such as growth rates, inflation, and unemployment.

Social Trends

Patterns of change or stability in societal behaviors, attitudes, and cultural norms over time, which influence various aspects of society such as consumer behavior.

Global Expansion

Refers to a company's growth beyond its original national boundaries into international markets.