Question
I need help understanding how to calculate the 2 questions below based on the given information. I believe I answered #1, but lease comment if
I need help understanding how to calculate the 2 questions below based on the given information. I believe I answered #1, but lease comment if I am correct, and if not what I did incorrect. As for #2 I am struggling to understand how to arrive at it.
Use the financial data below from XYZ, Inc. to answer the questions below. Note that the reported figures are in thousands of dollars:
2015 2014
Inventory
$219,686.00 $241,154.00
Cost of Sales
$54,661.00 $675,138.00
Net Income
$31,185.00 $64,150.00
Tax Rate
37% 37%
Note 1: If the first-in, first-out (FIFO) method of accounting for inventory had been used, inventory would have been approximately $26.9 million and $25.1 million higher than reported at 2015 and 2014, respectively.
Questions:
#1. What would the ending inventory have been in 2014 and 2015 had FIFO been used?
For 2015: $219,686 + 26,900 = $246,586 (in thousands)
For 2014: $241,154 + $25,100 = $266,254 (in thousands)
#2. What would be the net income for the year ending in 2015 had FIFO been used?
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