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Adriaan Taylor Corporation is a newly formed entity that engages in the purchase and resale of amphibious tour vehicles. Purchases for the first year of
Adriaan Taylor Corporation is a newly formed entity that engages in the purchase and resale of amphibious tour vehicles. Purchases for the first year of operation were as follows:
tableDatePurchases,Jan,, units @ $ eachMar,, units @ $ eachJun,, units @ $ eachAug,, units @ $ eachOct, units @ $ each,
Sales for this first year of operation amounted to units and totaled $
a If Adriaan Taylor uses the firstin firstout FIFO inventory method periodic approach what values would be assigned to ending inventory and cost of goods sold? How much is gross profit?
b If Adriaan Taylor uses the lastin firstout LIFO inventory method periodic approach what values would be assigned to ending inventory and cost of goods sold? How much is gross profit?
c If Adriaan Taylor uses the weightedaverage inventory method periodic approach what values would be assigned to ending inventory and cost of goods sold? How much is gross profit?
d Which of the above techniques produces the highest profit? Which of the above techniques reports the most "current" cost on a balance sheet? Which of the above techniques report the most "current" cost in measuring income? Which of the above techniques results in the lowest income tax obligation?
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