Question
The following information pertains to Baxter company for 2014. Beginning inventory 90 units @ $15 Units purchased 320 units @ $19 The ending inventory consisted
The following information pertains to Baxter company for 2014. Beginning inventory 90 units @ $15 Units purchased 320 units @ $19 The ending inventory consisted of 100 units. Baxter sold 310 units at $30 each. All purchases and sales were made with cash. Answer the following: A.) Compute the gross margin for Baxter company using the following cost flow assumptions: (1) FIFO (2) LIFO (3) Weighted Average. B.) What is the dollar amount of difference in net income between using FIFO versus LIFO? (Ignore income tax considerations.) C.) Determine the cash flow from operating activities, using each of the three cost flow assumptions listed in Part A. Ignore the effect of income taxes. (Amounts to be deducted should be indicated with a minus sign.) So find, Cash flows from operating activities, Cash inflow from customers, Cash outflow for inventory, net cash flow from operating activities for the following: (1) FIFO (2) LIFO (3) Weighted Average.
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