ACC Math

Given:
 

The finished goods inventory data for the first six months of Year 6 for Fan Company A is provided (see the “Inventory Template” attachment below). The inventory form shows the finished goods inventory as quantity available to sell and the sales made to retailers for the year. The same form is duplicated so you can compute the ending inventory for four different methods, as indicated on the template.
 

Task:
 

A.  Using the attached “Inventory Template,” compute the value of ending inventory using the following methods:

1.  Periodic FIFO

2.  Periodic average cost

3.  LIFO in a perpetual inventory system

4.  FIFO in a perpetual inventory system
 

B.  Write a short memo to the Fan Company A partners (suggested length of 1–2 pages) in which you:

1.  Explain your findings from part A.

2.  Recommend a method for Fan Company A management to use in computing inventory.

3.  Justify your recommendation.

a.  Include an explanation of the impact the method you recommended will have on net income.