Dear Den,
Thank you for your seventh message. My comments follow.
Sincerely,
Prof. Sue Stiner
Masaki Inden wrote:
> Dear Prof. Stiner,
>
> Thank you for your reply!
> How long did you do karate?
>
I did karate for about a year.
>
> Do you still do karate?
>
No, I am not doing karate now.
>
> Have you ever ridden a motorcycle?
>
I have never done that.
But, I want to get a motorcycle driver's license one
> of these days.
Good luck! If you get the motorcycle driver's license, what kind of
motorcycle do you want to have?
>
> What is the most exciting thing you have ever done in your life?
>
I played the drums in my high school's festival.
Great! What kind of drums did you play? Did you solo (play drums by
yourself)?
Where is the best place you have visited?
Why was it the best place?
> Homework:
>
> 1.
> What is the format for an American Income Statement?
>
> Revenue
> Less:Cost of Goods Sold
> Equals:Gross Margin
> Less:Operating Expenses
> Equals:Net Income (Loss)
Correct!
>
> 2.
> Use your words to tell me how to calculate cost of goods sold.
> You do not need to use any numbers.
>
> Cost of Goods = Beginning Inventory + purchase money - Ending
> Inventory
Correct!
>
> 2.
> Did Beach Toys use LIFO or FIFO to calculate the cost of goods
> sold?
>
> Beach Toys uses FIFO to value inventory.
Correct!
>
> 3.
> Does the purchase price of inventory rise or fall for Beach Toys,
> Inc?
>
> It is rising. Because,
> Revenues($30,000) - Cost of Goods Sold($10,000) = Gross
> Margin($20,000)
Correct: it is rising. We know that purchases rise because the later
purchases cost more than the earlier ones.
> 4.
> Which inventory method (LIFO or FIFO) is better for Beach Toys,
> Inc to use?
> "Better" means "results in lower income tax."
>
> FIFO is better to use when prices fall.
> LIFO is a better method to use when prices rise.
True. So LIFO is better for Beach Toys, because their purchase prices rise.
>
> Vocabulary - Income Statement (Part 1)
>
> English Japanese
Thank you for the vocabulary list.
This week we finish the income statement.
This week we learn about operating expenses.
The new lesson is at:
http://www72.homepage.villanova.edu/susan.stiner/cgu/income204.htm