Question
In Year One, the Major Corporation had the following inventory transactions: March 1: Buy 1,000 units at $7 each. May 1: Sell 800 units for
In Year One, the Major Corporation had the following inventory transactions:
March 1: Buy 1,000 units at $7 each.
May 1: Sell 800 units for $12 each.
August 1: Buy 1,000 units at $8 each.
October 1: Sell 700 units for $14 each.
December 1: Buy 1,000 units for $10 each.
In Year Two, the company had the following inventory transactions:
April 1: Sell 700 units for $17 each.
June 1: Buy 1,000 units for $11 each.
September 1: Sell 900 units for $20 each.
November 1: Buy 1,000 units for $12 each.
December 1: Sell 700 units for $22 each.
a. What amount of gross profit should this company recognize in Year One and also in Year Two if a periodic LIFO system is in use?
b. What amount of gross profit should this company recognize in Year One and also in Year Two if a perpetual LIFO system is in use?
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Auditing And Assurance Services
Authors: By David N. Ricchiute
6th Edition
0324024029, 9780324024029
