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): 19,500 units @ $10 $ 195,000 24,500 units @ $15 367,500 Beginning inventory $ 562,500 During 2024, 49,000 units were purchased for $20 per unit. Due to unexpected demand for the company's product, 2024 sales totaled 60,000 units at various prices, leaving 33,000 units in ending inventory. Calculate the amount to report for cost of goods sold for 2024. 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%. 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?
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): 19,500 units @ $10 $ 195,000 24,500 units @ $15 367,500 Beginning inventory $ 562,500 During 2024, 49,000 units were purchased for $20 per unit. Due to unexpected demand for the company's product, 2024 sales totaled 60,000 units at various prices, leaving 33,000 units in ending inventory. Calculate the amount to report for cost of goods sold for 2024. 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%. 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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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):
| 19,500 units @ $10 | $ 195,000 |
|---|---|
| 24,500 units @ $15 | 367,500 |
| Beginning inventory | $ 562,500 |
During 2024, 49,000 units were purchased for $20 per unit. Due to unexpected demand for the company's product, 2024 sales totaled 60,000 units at various prices, leaving 33,000 units in ending inventory.
- Calculate the amount to report for cost of goods sold for 2024.
- 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%.
- 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?
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