Question
FIFO LIFO The Inventory Company has provided you with three months of their inventory and purchases for the last three months: Date Item Quantity Unit
FIFO LIFO
The Inventory Company has provided you with three months of their inventory and purchases for the last three months:
Date | Item | Quantity | Unit Price |
July 1 | Begin Inventory | 2,500 | $38 |
July 15 | Purchase | 3,300 | $37 |
July 29 | Purchase | 5,500 | $36 |
Aug 11 | Purchase | 4,100 | $36 |
Aug 30 | Purchase | 6,700 | $35 |
Sept 14 | Purchase | 3,900 | $34 |
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During three months the company sold 23,200 units.Selling price is $78 and the companys tax rate is 32%.
Required:
A.Complete the worksheet for FIFO, LIFO and the income statement for the above information similar to the example we completed in class and also posted on the Excel worksheet created during this weeks class.
Example --- Worksheet for FIFO and LIFO
Date | Item | Qty | Unit $ | Total $ |
| End Inventory | CGS |
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B.Complete the required income statement comparison
| FIFO | LIFO |
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Sales $$ |
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CGS (Cost of Goods Sold) |
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Gross Profit |
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Sales Tax |
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Profit after Taxes |
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C.Explain which method you would recommend that the company should use and explain the reason for your decision.
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