B is corrent. Per ASC Topic 270, determining the cost of goods sold by using estimated gross profit rates is only appropriate for interim periods and is not appropriate for year-end external reporting. For year-end reporting, the actual cost of goods sold must be determined by using the inventory flow method which most clearly reflects income.
A is incorrect. Per ASC Topic 270, determining the cost of goods sold by using estimated gross profit rates is only appropriate for interim periods and is not appropriate for year-end external reporting. For year-end reporting, the actual cost of goods sold must be determined by using the inventory flow method which most clearly reflects income.
A is incorrect. Per ASC Topic 270, determining the cost of goods sold by using estimated gross profit rates is only appropriate for interim periods and is not appropriate for year-end external reporting. For year-end reporting, the actual cost of goods sold must be determined by using the inventory flow method which most clearly reflects income.
D is incorrect. Per ASC Topic 270, determining the cost of goods sold by using estimated gross profit rates is only appropriate for interim periods and is not appropriate for year-end external reporting. For year-end reporting, the actual cost of goods sold must be determined by using the inventory flow method which most clearly reflects income.
