01-27-2014, 02:17 AM
Q#1
ans: FIFO method
Q#2
Ans: Weighted average method
Q#3
Ans:
I shall be recommend that weighted average method to produce consistency in the financial reporting.
We know that, LIFO method has been banned in limited companies by international financial reporting standard. We know that, this is an inflation period. And FIFO method is not suitable for this situation. In FIFO method higher value of inventory and lower cost of goods sold. And we want that, the inventory can reflect fairly current market price in the company Balance sheet. And inventory cost can reflect as per current market price. So, the weighted average method is suitable.
ans: FIFO method
Q#2
Ans: Weighted average method
Q#3
Ans:
I shall be recommend that weighted average method to produce consistency in the financial reporting.
We know that, LIFO method has been banned in limited companies by international financial reporting standard. We know that, this is an inflation period. And FIFO method is not suitable for this situation. In FIFO method higher value of inventory and lower cost of goods sold. And we want that, the inventory can reflect fairly current market price in the company Balance sheet. And inventory cost can reflect as per current market price. So, the weighted average method is suitable.
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