The following information pertains to Boone Company for 2009. Beginning inventory 70 units @ $26 Units purchased
Question:
The following information pertains to Boone Company for 2009.
Beginning inventory 70 units @ $26
Units purchased 280 units @ $30
Ending inventory consisted of 30 units. Boone sold 320 units at $40 each. All purchases and sales were made with cash.
Required
a. Compute the gross margin for Boone Company using the following cost flow assumptions:
(1) FIFO,
(2) LIFO, and
(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 Requirement a. Ignore the effect of income taxes. Explain why these cash flows have no differences.
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
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a 1 Boone Company FIFO Sales 320 40 12800 Cost of Goods Sold From Beginning Inv 70 units 26 1820 Fro...View the full answer
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