Taylor Corporation reports inventory and cost of goods sold based on calculations from a LIFO...
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Taylor Corporation reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. The company's records under this system reveal the following inventory layers at the beginning of 2021 (listed in chronological order of acquisition): 19,500 units @ $10 24,500 units @ $15 Beginning inventory $ 195,000 367,500 $ 562,500 During 2021, 49,000 units were purchased for $20 per unit. Due to unexpected demand for the company's product, 2021 sales totaled 60,000 units at various prices, leaving 33,000 units in ending inventory. Required: 1. Calculate the amount to report for cost of goods sold for 2021. 2. Determine the amount of LIFO liquidation profit that the company must report in a disclosure note to its 2021 financial statements. Assume an income tax rate of 25%. 3. If the company decided to purchase an additional 11,000 units at $20 per unit at the end of the year, how much income tax currently payable would be saved? 1. 2. Cost of goods sold LIFO liquidation profit Income tax payable 3
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