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ABC Company has chosen to apply the LIFO approach for inventory valuation. As of December 31, 2023, they maintained a beginning inventory of 800 units
ABC Company has chosen to apply the LIFO approach for inventory valuation. As of December 31, 2023, they maintained a beginning inventory of 800 units at $15 per unit. Subsequent acquisitions transpired on February 1 (1,500 units at $17 per unit) and June 1 (2,000 units at $19 per unit). During the year, 3,000 units were sold, resulting in an ending inventory of 1,300 units.
- Calculate the cost of goods sold (COGS) using the LIFO method for ABC Company.
- Determine the value of ending inventory using the LIFO method.
- Discuss how ABC Company's adoption of LIFO affects its tax obligations.
- Analyze the impact of ABC Company’s financial statements under LIFO versus FIFO.
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