A company 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 2024 (listed in chronological order of acquisition): 10,000 units @ $15 15,000 units @ $20 Beginning inventory $ 150,000 300,000 $ 450,000 During 2024, 30,000 units were purchased for $25 per unit. Due to unexpected demand for the company's product, 2024 sales totaled 40,000 units at various prices, leaving 15,000 units in ending inventory. Required: 1. Calculate the amount to report for cost of goods sold for 2024. 2. Determine the amount of LIFO liquidation profit that the company must report in a disclosure note to its 2024 financial statements. Assume an income tax rate of 25%. 3. If the company decided to purchase an additional 10,000 units at $25 per unit at the end of the year, how much income tax currently payable would be saved? Answer is not complete. $ 950,000 125,000 1. Cost of goods sold 2. LIFO liquidation profit 3. Income tax payable

A company 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 2024 (listed in chronological order of acquisition): 10,000 units @ $15 15,000 units @ $20 Beginning inventory $ 150,000 300,000 $ 450,000 During 2024, 30,000 units were purchased for $25 per unit. Due to unexpected demand for the company's product, 2024 sales totaled 40,000 units at various prices, leaving 15,000 units in ending inventory. Required: 1. Calculate the amount to report for cost of goods sold for 2024. 2. Determine the amount of LIFO liquidation profit that the company must report in a disclosure note to its 2024 financial statements. Assume an income tax rate of 25%. 3. If the company decided to purchase an additional 10,000 units at $25 per unit at the end of the year, how much income tax currently payable would be saved? Answer is not complete. $ 950,000 125,000 1. Cost of goods sold 2. LIFO liquidation profit 3. Income tax payable

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Description: A company reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. The company'srecords under this system reveal the following inventory layers at the beginning of 2024 (listed in chronological order of a

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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7. 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): 17,500 units @ $15 $ 262,500 22,500 units @ $20 450,000 Beginning inventory $ 712,500 During 2021, 45,000 units were purchased for $25 per unit. Due to unexpected demand for the company's product, 2021 sales totaled 55,000 units at various prices, leaving 30,000 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 10,000 units at $25 per unit at the end of the year, how much income tax currently payable would be saved?