70.2K

Verified Solution

Link Copied!

ppuit ull aigumeht to increase prices? 7A The management of Danica Co. asks your help in determining the comparative Compute ending inver of the FIFO and LIFO inventory cost flow methods. For 2017, the accounting prepare income staten effects records provide the following data. Inventory, January 1 (10,000 units) Cost of 100,000 units purchased Selling price of 84,000 units sold Operating expenses 47,000 532,000 735,000 140,000 and answer questions FIFO and LIFO LO 2) Units purchased consisted of 35,000 units at $5.10 on May 10; 35,000 units at $5.30 on August 15, and 30,000 units at $5.60 on November 20, Income taxes are 30%. Instructions (a) Prepare comparative condensed income statements for 2017 under FIFO and LIFO. (a) Net income Show computations of ending inventory.) (1) Which inventory cost flow method produces the most meaningful inventory (2) Which inventory cost flow method produces the most meaningful net income? (3) Which inventory cost flow method is most likely to approximate actual physical (4) How much additional cash will be available for management under LIFO than (5) How much of the gross profit under FIFO is illusory in comparison with the gross and ending inventory a FIFO $113,120 IFO $101,220 (b) Answer the following questions for management. amount for the balance sheet? Why? Why? flow of the goods? Why? under FIFO? Why? profit under LIFO? Calculate cost of goods LIFO, FIFO, and movi average cost under the perpetual system;comp 2

Answer & Explanation Solved by verified expert

See Answer