Question
The Brick Company had cash sales of $221,200 for Year 1, its first year of operation. On April 2, the company purchased 197 units of
The Brick Company had cash sales of $221,200 for Year 1, its first year of operation. On April 2, the company purchased 197 units of inventory at $160 per unit. On September 1, an additional 148 units were purchased for $176 per unit. The company had 68 units on hand at the end of the year. The companys income tax rate is 40 percent. All transactions are cash transactions. Required
- The preceding paragraph describes five accounting events: (1) a sales transaction, (2) the first purchase of inventory, (3) a second purchase of inventory, (4) the recognition of cost of goods sold expense, and (5) the payment of income tax expense. Show the amounts of each event in horizontal statements models, assuming first a FIFO and then a LIFO cost flow.
- Compute net income using FIFO.
- Compute net income using LIFO.
- Which method, FIFO or LIFO, produced the larger amount of assets on the balance sheet?
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Basic Accounting Concepts Principles And Procedures Volume 2
Authors: Gregory Mostyn, Worthy And James
1st Edition
0979149495, 9780979149498
