You are a financial advisor with a client in the wholesale produce business that just...
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Accounting
You are a financial advisor with a client in the wholesale produce business that just completed its first year of operations. Due to weather conditions, the cost of acquiring produce to resell has escalated during the ladder part of this period. Your client Gish mentions that because her business sells perishable goods, she has striven to maintain a FIFO flow of the physical goods. Although sales are good, the increased cost of inventory has put the business in a tight cash position. Gish has expressed concern regarding the ability of the business to meet income tax obligations.Required: Prepare a memorandum that identifies, explains, and justifies the inventory method you recommend your client, Ms. Gish, adopt.
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