Question
XYZ Company uses the LIFO method for inventory valuation. For the year ended December 31, 2023, the following information is provided: Beginning Inventory: 2,000 units
XYZ Company uses the LIFO method for inventory valuation. For the year ended December 31, 2023, the following information is provided:
- Beginning Inventory: 2,000 units at $25 per unit
- Purchases:
- March 1: 3,000 units at $28 per unit
- July 1: 4,000 units at $30 per unit
- Sales:
- 7,000 units sold during the year
- Ending Inventory: 2,000 units
a. Calculate the cost of goods sold (COGS) using the LIFO method. b. Determine the value of ending inventory using the LIFO method. c. Prepare XYZ Company’s income statement showing gross profit using the LIFO method. d. Explain how the use of LIFO impacts the balance sheet presentation compared to FIFO.
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Using Financial Accounting Information The Alternative to Debits and Credits
Authors: Gary A. Porter, Curtis L. Norton
7th Edition
978-0-538-4527, 0-538-45274-9, 978-1133161646
