XRY Ltd is a US-based retailer and it uses LIFO method for valuation of inventory....
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Accounting
XRY Ltd is a US-based retailer and it uses LIFO method for valuation of inventory. Following information is obtained from its inventory records for 2019:
Inventory
Units
Unit price $
Opening balance
5000
10
January purchases
5000
12
April purchases
5000
14
June purchases
5000
16
Sold during 2019
19000
You are require to answer the following (no calculations are necessary):
a) In light of US-GAAP, what are your key observations regarding cost of inventory balance and units sold?
b) What are the potential consequences of current inventory management on profitability and availability of inventory?
Answer & Explanation
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