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Need help with in 40 mins please help Question No 3: The management of Perrineau Co. is reevaluating the appropriateness of using its present inventory
Need help with in 40 mins please help
Question No 3: The management of Perrineau Co. is reevaluating the appropriateness of using its present inventory cost flow method, which is average-cost. They request your help in determining the results of operations for 2019 if either the FIFO method or the LIFO method had been used. For 2019, the accounting records show the following data: Inventory Purchase and Sales Beginning (8,000 units) $16,000 Total sales (180,000 units) $747,000 Ending (18,000 units) Total cost of goods purchased $468,000 (190,000 units) Operating expenses were $130,000, and the company's income tax rate is 40%. Purchase were made in different quarters as follows: Quarter Units Unit cost Total 1 50,000 $2.20 $110,000 2 40,000 2.40 96,000 3 40,000 2.50 100,000 4 60,000 2.70 162,000 Requirements: [Marks 9+3=12] (a) Prepare comparative condensed income statements for 2019 under FIFO and LIFO. (Show computations of ending inventory.) (b) How much more cash will be available for management under LIFO than under FIFO? WhyStep by Step Solution
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