The top executives of PGH Company ask for your help in determining the comparative effects of the FIFO and UFO inventory cost flow methocks The accounting records for the year 2020 show the following Sold 98,000 units during the year generating total sales revenue of $750,000 Total Operating Expenses: $124.000 Income Tax Rate is 28% [hint: you must calculate income tax expense) Beginning Inventory, January 1 (10,000 units) $35.000 Units purchased during the year. May 10 - 35,000 units at $2.70 August 15 - 60,000 units at $3.90 November 20 - 25,000 units at $4.20 Instructions: Cut and paste questions 1 - 4 in your window and complete the requirements below. Make sure your answers are clearly marked in your solution and show your work in order to receive credit. Add more space as necessary to include your work. Hint. Before you start, calculate number of units available for sale and cost of units available for sale 1. Calculate Cost of Goods Sold under FIFO and LIFO. Clearly label your answer as shown below) in your solution and show all supporting work below your answer. a. FIFO COST OF GOODS SOLD in answert Show all work to support answer here: LIFO COST OF GOODS SOLD till in answer Show all work to support answer here 2. Cliculite Ending Inventory under FIFO and LIFO show all work belowl FIFOENDING INVENTORY hinauwel Show all Workowe here LEGENDING INVENTORN in answer Show work here Instre haben window and contacte it as directed hore Pe 22nd Othe Penso LIN Coco SA b. UFO ENDING INVENTORY (fill in answer) Show all work to support answer here: 3. Instructions: Cut and paste this table into your window and complete it as directed here. Prepare comparative condensed income statements for 2020 under FIFO and LIFO using the answers you obtained in [1a) and (1b) and the data provided for PGH Company above. FIFO LIFO Sales Sales $ Cost of Goods Sold Cost of Goods Sold Gross Profit Gross Profit Operating Expenses Operating Expenses Income before taxes Income before taxes Income tax expense income tax expense Net Income Net Income 4. Answer the following questions: 4a. Which inventory cost flow method produces the ending inventory amount that most closely approximates the amount that would have to be paid to replace the inventory? Answer: Ab. Which inventory cost flow method is most ikely to approximate the actual physical flow of the goods Answer 4. Which inventory cost now method produces the income amount that is more likelyan Indicator of next period's net income Answer MacBook Air
