FILLO, Inc

question 97

Essay

FILLO, Inc.’s inventory activity in May 2011 was as follows:

Part A: Record the effect of the above inventory activity on the accounting equation assuming perpetual weighted average cost is used.

Part B: Record the effect of the above inventory activity on the accounting equation assuming perpetual first-in, first-out (FIFO) is used.

Part C: Using the information from Parts A and B above,for each item,write in the amount (even if $0)as of or for the Month Ended May 31,2011.Write in the one financial statement where the line item is found.

---

Definitions:

Desired Margin

The target profit margin a company aims for in pricing its products or services.

Production Level

the quantity of goods and services produced by a business or economy within a certain period.

Perfectly Elastic

Describes a market condition where demand or supply responds instantaneously to changes in price with an infinite change in quantity demanded or supplied, depicted as a horizontal line in graphical analysis.

Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, reflecting consumer sensitivity to price changes.