Archer Industries prepares quarterly financial statements.During the fourthquarter the following occurred:Purchases:Quantity9,000 units*21,000 units24,000 units10,000 units64,000 unitsUnit ValueTotal Value$ 54,000168,000240,000160,000$622,000$6/u$8/uOct.1.Oct. 10Nov. 20$10/uDec. 30$16/uAvailable*Beginning InventorySales:Unit ValueQuantity11,000 units10,000 units31,000 units52,000 unitsTotal ValueOct. 18Nov. 12Dec. 21Units Sold18/u$198,000200,000|775,000$1,173,00020/u25/uThe taxSelling and administrative expenses for the period were $359, 000.rate is 30 percent.A. Calculate the value of ending inventory, the cost of goods sold, anddetermine reported income (after taxes) under theLIFO periodic method:Optional Work Space For CalculationsEndingInventoryCost ofGoods SoldNet IncomeAfter TaxesB. If the company had been on the FIFO method, how muchmore or less would it have paid in income taxes?C. Determine the maximum amount Archer could have improved itsreported 4th quarter income after taxes if it had delayed its finalpurchasing decision under FIFO or under LIFO until January.Improvement in IATFIFOLIFO

LIFO (Last-in-first Out): As the name itself suggests, the latest inventory and purchases will be…

Archer Industries prepares quarterly financial statements. During the fourth quarter the following occurred: Purchases: Unit Value $6/u $8/u $10/u $16/u Total Value $ 54,000 Quantity 9,000 units* @ 21,000 units 24,000 units 10,000 units 64,000 units Oct. 1 Oct. 10 168,000 240,000 160,000 $622,000 Nov. 20 Dec. 30 Available *Beginning Inventory Sales: Unit Value 18/u Quantity 11,000 units 10,000 units 31,000 units Units Sold 52,000 units Total Value $198,000 200,000| 775,000 $1,173,000 Oct. 18 Nov. 12 Dec. 21 20/u 25/u Selling and administrative expenses for the period were $359,000. The tax rate is 30 percent. A. Calculate the value of ending inventory, the cost of goods sold, and determine reported income (after taxes) under the LIFO periodic method: Optional Work Space For Calculations Ending Inventory Cost of Goods Sold Net Income After Taxes B. If the company had been on the FIFO method, how much more or less would it have paid in income taxes? c. Determine the maximum amount Archer could have improved its reported 4th quarter income after taxes if it had delayed its final purchasing decision under FIFO or under LIFO until January.

Archer Industries prepares quarterly financial statements. During the fourth quarter the following occurred: Purchases: Unit Value $6/u $8/u $10/u $16/u Total Value $ 54,000 Quantity 9,000 units* @ 21,000 units 24,000 units 10,000 units 64,000 units Oct. 1 Oct. 10 168,000 240,000 160,000 $622,000 Nov. 20 Dec. 30 Available *Beginning Inventory Sales: Unit Value 18/u Quantity 11,000 units 10,000 units 31,000 units Units Sold 52,000 units Total Value $198,000 200,000| 775,000 $1,173,000 Oct. 18 Nov. 12 Dec. 21 20/u 25/u Selling and administrative expenses for the period were $359,000. The tax rate is 30 percent. A. Calculate the value of ending inventory, the cost of goods sold, and determine reported income (after taxes) under the LIFO periodic method: Optional Work Space For Calculations Ending Inventory Cost of Goods Sold Net Income After Taxes B. If the company had been on the FIFO method, how much more or less would it have paid in income taxes? c. Determine the maximum amount Archer could have improved its reported 4th quarter income after taxes if it had delayed its final purchasing decision under FIFO or under LIFO until January.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 8P: Comprehensive The following information for 2019 is available for Marino Company: 1. The beginning...

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Question

Archer Industries prepares quarterly financial statements.
During the fourth
quarter the following occurred:
Purchases:
Quantity
9,000 units*
21,000 units
24,000 units
10,000 units
64,000 units
Unit Value
Total Value
$ 54,000
168,000
240,000
160,000
$622,000
$6/u
$8/u
Oct.
1.
Oct. 10
Nov. 20
$10/u
Dec. 30
$16/u
Available
*Beginning Inventory
Sales:
Unit Value
Quantity
11,000 units
10,000 units
31,000 units
52,000 units
Total Value
Oct. 18
Nov. 12
Dec. 21
Units Sold
18/u
$198,000
200,000|
775,000
$1,173,000
20/u
25/u
The tax
Selling and administrative expenses for the period were $359, 000.
rate is 30 percent.
A. Calculate the value of ending inventory, the cost of goods sold, and
determine reported income (after taxes) under the
LIFO periodic method:
Optional Work Space For Calculations
Ending
Inventory
Cost of
Goods Sold
Net Income
After Taxes
B. If the company had been on the FIFO method, how much
more or less would it have paid in income taxes?
C. Determine the maximum amount Archer could have improved its
reported 4th quarter income after taxes if it had delayed its final
purchasing decision under FIFO or under LIFO until January.
Improvement in IAT
FIFO
LIFO

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