Answered step by step
Verified Expert Solution
Question
1 Approved Answer
PLEASE SHOW YOUR LABELLED WORK 3a. Castillo Corporation has maintained a periodic inventory system and used the LIFO cost flow alternative for years. The earliest
PLEASE SHOW YOUR LABELLED WORK
3a. Castillo Corporation has maintained a periodic inventory system and used the LIFO cost flow alternative for years. The earliest layers of LIFO inventory date back 15 years. The company had beginning inventory at January 1, 2021, consisting of three layers, starting with the oldest layer of 150,000 units. UNITS 150,000 80,000 15,000 245.000 UNIT COST $10 12 20 TOTAL COST $1,500,000 960,000 300,000 $2.760.000 During the year, an involuntary reduction of inventory occurred. Ending inventory dropped to 120,000 units. The current replacement value of those units is $35 per unit. The appropriate tax rate is 27%. 3a. Provide two examples of possible involuntary reductions of inventory. Provide two examples of voluntary reductions of inventory. 3b. Determine the after-tax change in income. Show labelled workStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started