Required:a-1. Compute the cost of goods sold relating to the sale on July 28 and the ending inventory of Kazomma 900 dirt bikes atSeptember 30, using Average cost.a-2. Compute the cost of goods sold relating to the sale on July 28 and the ending inventory of Kazomma 900 dirt bikes atSeptember 30, using FIFO method.a-3. Compute the cost of goods sold relating to the sale on July 28 and the ending inventory of Kazomma 900 dirt bikes atSeptember 30, using LIFO method.b-1. Which of the three cost flow assumptions will result in Speed World Cycles reporting the highest net income for thecurrent year?b-2. Which of the three cost flow assumptions minimizes the income taxes owed by Speed World Cycles for the year?b-3. May Speed World Cycles use the cost flow assumption that results in the highest net income for the current year in itsfinancial statements, but use the cost flow assumption that minimizes taxable income for the current year in its income taxreturn? Speed World Cycles sells high-performance motorcycles and motocross racers. One of Speed World's most popular modelsis the Kazomma 900 dirt bike. During the current year, Speed World Cycles purchased eight of these bikes at the followingcosts.Purchase DateJuly 1July 22Aug. 3UnitsPurchased Unit Cost2338$4,9505,0005,100Total Cost$ 9,90015,00015,300$ 40,200On July 28, Speed World Cycles sold four Kazomma 900 dirt bikes to the Vince Wilson racing team. The remaining fourbikes remained in inventory at September 30, the end of Speed World's fiscal year.Assume that Speed World Cycles uses a perpetual inventory system. (See the data provided.)Required:a-1. Compute the cost of goods sold relating to the sale on July 28 and the ending inventory of Kazomma 900 dirt bikes atSeptember 30, using Average cost.a-2. Compute the cost of goods sold relating to the sale on July 28 and the ending inventory of Kazomma 900 dirt bikes atSeptember 30, using FIFO method.a-3. Compute the cost of goods sold relating to the sale on July 28 and the ending inventory of Kazomma 900 dirt bikes atSeptember 30, using LIFO method.b-1. Which of the three cost flow assumptions will result in Speed World Cycles reporting the highest net income for thecurrent year?b-2. Which of the three cost flow assumptions minimizes the income taxes owed by Speed World Cycles for the year?b-3. May Speed World Cycles use the cost flow assumption that results in the highest net income for the current year in itsfinancial statements, but use the cost flow assumption that minimizes taxable income for the current year in its income tax

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Speed World Cycles sells high-performance motorcycles and motocross racers. One of Speed World's most popular models is the Kazomma 900 dirt bike. During the current year, Speed World Cycles purchased eight of these bikes at the following costs. Purchase Date July 1 July 22 Aug. 3 Units Purchased Unit Cost Total Cost 2 3 3 8 $4,950 5,000 5,100 $ 9,900 15,000 15,300 $ 40,200 On July 28, Speed World Cycles sold four Kazomma 900 dirt bikes to the Vince Wilson racing team. The remaining four bikes remained in inventory at September 30, the end of Speed World's fiscal year. Assume that Speed World Cycles uses a perpetual inventory system. (See the data provided.) Required: a-1. Compute the cost of goods sold relating to the sale on July 28 and the ending inventory of Kazomma 900 dirt bikes at September 30, using Average cost. a-2. Compute the cost of goods sold relating to the sale on July 28 and the ending inventory of Kazomma 900 dirt bikes at September 30, using FIFO method. a-3. Compute the cost of goods sold relating to the sale on July 28 and the ending inventory of Kazomma 900 dirt bikes at September 30, using LIFO method. b-1. Which of the three cost flow assumptions will result in Speed World Cycles reporting the highest net income for the current year? b-2. Which of the three cost flow assumptions minimizes the income taxes owed by Speed World Cycles for the year? b-3. May Speed World Cycles use the cost flow assumption that results in the highest net income for the current year in its financial statements, but use the cost flow assumption that minimizes taxable income for the current year in its income tax

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 15RE: GameDay sells recreational vehicles along with secure parking storage to customers. Game Day sells...