Daniel Company uses a periodic inventory system. Data for 2015: beginning...
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Accounting
Daniel Company uses a periodic inventory system. Data for 2015: beginning merchandise inventory (December 31, 2014), 2,080 units at $36; purchases, 7,960 units at $38; expenses (excluding income taxes), $192,700; ending inventory per physical count at December 31, 2015, 1,730; sales, 8,310 units; sales price per unit, $76; and average income tax rate, 34 percent
Compute cost of goods sold and prepare income statements under the FIFO, LIFO, and average cost inventory costing methods. (Do not round your intermediate calculations.)
Inventory Costing Method
Cost of Goods Sold
Units
FIFO
LIFO
Average Cost
Beginning inventory
2,080
$74,880
$74,880
$74,880
Purchases
7,960
302,480
302,480
302,480
Goods available for sale
10,040
377,360
377,360
377,360
Ending inventory
1,730
65,740
62,280
Cost of goods sold
8,310
$311,620
$315,080
Income Statement
FIFO
LIFO
Average Cost
Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow)?
Net income
Income taxes paid
Answer & Explanation
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