The Records of Atlantis Company Reflected the Following for the Month

question 112

Essay

The records of Atlantis Company reflected the following for the month of February:
$\begin{array}{llcc}\text { Date } & {\text { Transaction }} & \text { Number of Units } & \text { Unit Cost } \\2 / 1 & \text { Beginning inventory } & 600 & \$ 3 \\2 / 2 & \text { Purchase No.1 } & 500 & \$ 4 \\2 / 5 & \text { Sale No. 1 } & 700 & \\2 / 12 & \text { Purchase No. } 2 & 600 & \$ 5\\2 / 15 & \text { Sale No. 2 } & 700 & \\2 / 23 & \text { Purchase No. } 3 & 900 &\$ 6\\2 / 28 & \text { Ending inventory} & ? &\\\end{array}$
Determine the amount of ending inventory and cost of goods sold using the following methods:
$\begin{array} { l c c c } & \text { Method } & \text { Inventory } & \text { Cost of Goods Sold } \\ \text { A. } & \text { LIFO } & \$ & \$ \\ \text { B. FIFO } & \text { F } & \$ & \$ \end{array}$

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Definitions:

Indirect Method

A technique used in cash flow statements where net income is adjusted for non-cash items and changes in working capital to calculate cash flow from operating activities.

Indirect Method

A technique used in cash flow statements to adjust net income for the changes in non-cash accounts to compute cash flow from operating activities.

Accrual-Basis Operating Income

The measure of a company’s operating profit that includes all earned revenue and incurred expenses, recognized as they are earned or incurred, not when cash is exchanged.

Working Capital Accounts

Accounts representing the operating liquidity available to a business, encompassing accounts receivable, accounts payable, inventory, etc.