| Course | AC116 Accounting II |
|---|---|
| Unit | Unit 1 |
| Paper type | Discussion board post |
| Length | About 430 words, 2 pages double-spaced |
| Format | APA 7 discussion post |
| School | Purdue University Global |
| Program | BS in Accounting |
| Updated | October 2026 |
Free sample paper for AC116 Unit 1
Same Posts, Same Year, Different Profit: A Unit 1 Post on Two Farm Stores, Two Cost Methods and the Note That Explains Them
AC116 · Unit 1 Discussion
Posted by [Student Name]
Store A, Store B and their figures are composite; the inventory standard and textbook cited are real.
Initial Post
Here is a small example. Store A and Store B are farm supply stores in neighboring towns. Each bought steel T-posts in three lots this year: 400 posts at $4.10 in March, 300 at $4.50 in June and 300 at $4.90 in September, 1,000 posts costing $4,520. Each sold 700 posts at $7.00, for $4,900 of sales. Store A uses first in, first out. Store B uses weighted average cost.
1. Cost of goods sold: Store A, 400 at $4.10 plus 300 at $4.50, equals $2,990. Store B, 700 at the average of $4.52, equals $3,164.
2. Gross profit: Store A, $4,900 minus $2,990, equals $1,910. Store B, $4,900 minus $3,164, equals $1,736.
3. Difference: Store A reports $174 more gross profit, and its ending inventory of 300 posts is carried at $1,470 against Store B's $1,356.
Neither store has made an error: both methods are permitted, each store applies its method consistently, and the difference comes entirely from which purchase prices are assigned to the posts that were sold.
When prices rise, first in, first out assigns the older, cheaper costs to goods sold, so it shows higher profit and an ending inventory closer to current prices. Weighted average smooths the prices together (Franklin et al., 2019). Inventory is measured at cost under whichever method the company chooses, with a later write-down if cost exceeds net realizable value (Financial Accounting Standards Board, 2015).
Because the methods differ, a reader comparing Store A with Store B learns nothing from the gross profit figures alone. The note on significant accounting policies is where each store states its cost method. Without that note, a lender might conclude Store A is better managed when it simply uses a different method.
Question for classmates: if you were lending to one of these stores, would you recompute both on the same method before comparing, or accept each as reported?
Reply to Malik
Malik, your point that a store cannot switch methods every year to flatter profit is right, and it connects to consistency. I would add that a change is allowed when a company can justify the new method as preferable, but it must be disclosed, so the note matters even more in the year of a change.
References
Financial Accounting Standards Board. (2015). Inventory (Topic 330): Simplifying the measurement of inventory (Accounting Standards Update No. 2015-11). https://www.fasb.org
Franklin, M., Graybeal, P., & Cooper, D. (2019). Principles of accounting, volume 1: Financial accounting. OpenStax. https://openstax.org/details/books/principles-financial-accounting
What the AC116 Unit 1 assignment asks for
The first AC116 discussion usually asks why two companies with the same transactions can report different profit. Build a small, checkable example: two businesses, identical purchases at changing prices and identical sales. Compute cost of goods sold and gross profit under two permitted methods, keeping the numbers simple enough for classmates to verify. Then explain why neither company has made an error, using the ideas of permitted alternatives and consistency. Close by pointing to the disclosure that tells readers which method was used, and say what a reader should do with that information. Posts of 350 to 450 words are typical. End with a question for discussion. Replies should rerun a classmate's figures or change an assumption. Cite the textbook or a standard in APA 7.
Inside the AC116 Unit 1 example
The sample introduces two farm supply stores that bought T-posts in March, June and September at $4.10, $4.50 and $4.90, and each sold 700 at $7.00. A numbered comparison follows: cost of goods sold of $2,990 under first in, first out against $3,164 under weighted average, gross profit of $1,910 against $1,736, and ending inventories of $1,470 and $1,356. The highlighted sentence states that neither store erred. A paragraph explains why rising prices favor first in, first out and cites the inventory standard on measurement at cost. Another argues that a lender comparing the stores needs the policy note. The post asks whether to recompute before comparing, and the reply extends a classmate's point to method changes and disclosure.
AC116 Unit 1 rubric: what earns full points
AC116 discussion rubrics usually reward a correct, checkable example and a clear explanation of why the results differ. Arithmetic that classmates can verify earns credit for precision. Explaining that both methods are permitted and consistently applied addresses the heart of the prompt. Pointing to the accounting policy note shows understanding of disclosure, a frequent scoring point. A question that invites real analysis adds to the post's grade. Replies earn points when they rerun figures, change an assumption or add a rule. Purdue Global discussion deadlines carry points. Clear writing finishes the content score, and the AC116 Unit 1 citation points go to APA 7 references for the textbook or standard the post leans on.
AC116 Unit 1 help: mistakes that cost points
Many first AC116 posts use numbers too large or complex to check by eye, and errors creep in. Others imply one method is correct and the other misleading. Some forget to compare ending inventory, missing half the effect. The disclosure point is often absent, though it is what the prompt usually builds toward. Last in, first out is sometimes described as allowed everywhere, when international standards prohibit it. Replies restate the classmate's post. If you need a clean pair of examples and a post built around them, our writers can draft one for your section's prompt.
Get an AC116 Unit 1 example written to your instructions
With the prompt for Unit 1, its rubric and any industry or product line the instructions specify, the two stores are built for your section rather than around steel fence posts. The first custom sample is free and lands within 24-48h, which usually leaves time to post a version of your own before replies open. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
More AC116 papers and BS in Accounting samples
- AC116 Unit 2: Receivables Entries Problem
- AC116 Unit 3: Allowance Estimation Exercise
- AC116 Unit 4: Inventory Costing Comparison
- AC116 Unit 5: Depreciation Schedule
- AC116 Unit 6: Asset Disposal Problem
- AC116 Unit 7: Payroll Register Exercise
- AC116 Unit 8: Bond Amortization Schedule
- AC116 Unit 9: Seminar Reflection
- AC116 Unit 10: Cash Flow Statement
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- AC112 Unit 1: Why Managers Read Entries Post
AC116 Unit 1 questions, answered
Does the post have to use real companies?
Most AC116 Unit 1 prompts accept an invented pair, and invented figures keep the arithmetic small enough for a classmate to check. When the instructions ask for real companies, the policy notes in their annual reports name the inventory method, and the comparison is drawn from those disclosures with the source cited. Either way the point being graded is the gap and its cause.
Can the post include depreciation as well as inventory?
It can, and some sections invite a second example. Straight line set against an accelerated method makes the same point about identical facts, but two examples in one post tend to crowd the table. The finished sample keeps inventory as the main case and mentions depreciation in one sentence, as a further source of difference the policy note would reveal.
Which replies to a classmate's pair of companies earn credit?
A reply that reruns the classmate's figures, or changes one assumption such as falling rather than rising costs and says which store would then report more, shows the same reasoning the post was graded on. Replies that only praise the example or restate the prompt tend to score at the bottom of the reply criteria in AC116 sections.
Where can I find a free AC116 Unit 1 sample paper?
This page holds a complete AC116 Unit 1 discussion post comparing two farm stores' fence post costs, one store on first in, first out and the other on an average cost, with the policy note argument and a reply.
Why does Store A report more profit in the AC116 Unit 1 sample?
Prices rose during the year, and first in, first out charges the oldest, cheapest posts to cost of goods sold. Weighted average blends in the newer prices, so its cost is higher and profit lower.