Study Appendix 16A. Kalitzki Implements Company had sales revenue of $710,000 in 20X2. Pertinent data for its

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Study Appendix 16A. Kalitzki Implements Company had sales revenue of $710,000 in 20X2.

Pertinent data for its only product in 20X2 included the following:

1. Prepare a statement of gross margin for 20X2. Use two columns, one assuming LIFO and one assuming FIFO.

2. Assume that Kalitzki is reporting to the tax authorities and has a 45% income tax rate. Suppose all transactions are for cash. Which inventory method results in more cash for Kalitzki? By how much?

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Introduction to Management Accounting

ISBN: 978-0133058789

16th edition

Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta

Question Posted: Nov 19, 2014 07:08 AM

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Study Appendix 16A. Kalitzki Implements Company had sales revenue of $710,000 in 20X2. Pertinent data for its

Question:

Inventory, December 31,0 February purchases August purchases Sales for the year $180,000 280,000 544,000 15,000 units at $12 20,000 units at $14 34,000 units at $16 30000 units

Step by Step Answer:

1 2 Gross margin is higher under FIFO However cash wi...View the full answer

Introduction to Management Accounting

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