Assume that The Style sold 120 gowns during 2018 and uses the LIFO method to account for inventory. The Style's income tax rate is 35%. Read the requirements. Requirement 1. Compute The Style's cost of goods sold for evening gowns Units Unit price From beginning inventory From purchase in February From purchase in June From purchase in December LIFO cost of goods sold 18 $ 23 52 27 950 $ 1,225 1,275 1,325 2018. Total 17,100 28,175 66,300 35.775 147,350 C $ Requirement 2. Compute what cost of goods sold would have been if The Style had purchased enough inventory in December-at $1,325 per evening gown-to keep year-end inventory at the same level it was at the beginning of the year.
Assume that The Style sold 120 gowns during 2018 and uses the LIFO method to account for inventory. The Style's income tax rate is 35%. Read the requirements. Requirement 1. Compute The Style's cost of goods sold for evening gowns Units Unit price From beginning inventory From purchase in February From purchase in June From purchase in December LIFO cost of goods sold 18 $ 23 52 27 950 $ 1,225 1,275 1,325 2018. Total 17,100 28,175 66,300 35.775 147,350 C $ Requirement 2. Compute what cost of goods sold would have been if The Style had purchased enough inventory in December-at $1,325 per evening gown-to keep year-end inventory at the same level it was at the beginning of the year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Suppose The Style Fashions, a specialty retailer, had these records for evening gowns during 2018:
(Click the icon to view inventory data.)
Assume that The Style sold 120 gowns during 2018 and uses the LIFO method to account for inventory. The Style's income tax rate is 35%.
Read the requirements.
Requirement 1. Compute The Style's cost of goods sold for evening gowns in 2018.
Unit price
Total
Units
From beginning inventory
From purchase in February
From purchase in June
From purchase in December
LIFO cost of goods sold
Requirement 2. Compute what cost of goods sold would have been if The Style had purchased enough inventory in December-at $1,325 per evening gown-to keep year-end inventory at the same level it was at the beginning of the
year.
Cost of goods sold without LIFO liquidation
18 $
23
52
27
Units
950
1,225
1,275
1,325
$
17,100
28,175
66,300
35,775
147,350
Unit price
Total
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