Alpha Inc.

Scenario: Calculate Cost of Goods Sold (COGS)

Data:

• Beginning Inventory: 1,000 units at $10 per unit
• Purchases:
  • January 1: 2,000 units at $12 per unit
  • April 1: 3,000 units at $14 per unit

• Sales: 4,000 units sold during the year
• Ending Inventory: 2,000 units

Requirements:

1. Calculate the Cost of Goods Sold using the FIFO method.
2. Determine the value of Ending Inventory using the FIFO method.
3. Discuss how the FIFO method impacts Alpha Inc.'s income tax liability.
4. Analyze the financial statements' presentation differences between FIFO and LIFO.