Cansela Corporation reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. The company began 2024 with inventory of 7,600 units of its only product. The beginning inventory balance of $107,200 consisted of the Following layers: 3,600 units at $12 per unit 4,000 units at $16 per unit Beginning inventory 2024 2025 2026 During the three years 2024-2026, the cost of inventory remained constant at $18 per unit. Unit purchases and sales during these years were as follows: Purchases 34,000 45,000 36,000 = Sales 35,500 47,500 37,400 $ 43,200 64,000 $ 107,200 Required: 1. Calculate cost of goods sold for 2024, 2025, and 2026. 2. Disregarding income tax, determine the LIFO liquidation profit or loss, if any, for each of the three years. 3. Determine the effects of LIFO liquidation on cost of goods sold and net income for 2024, 2025, and 2026. Cansela's effective income tax rate is 25%.

Cansela Corporation reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. The company began 2024 with inventory of 7,600 units of its only product. The beginning inventory balance of $107,200 consisted of the Following layers: 3,600 units at $12 per unit 4,000 units at $16 per unit Beginning inventory 2024 2025 2026 During the three years 2024-2026, the cost of inventory remained constant at $18 per unit. Unit purchases and sales during these years were as follows: Purchases 34,000 45,000 36,000 = Sales 35,500 47,500 37,400 $ 43,200 64,000 $ 107,200 Required: 1. Calculate cost of goods sold for 2024, 2025, and 2026. 2. Disregarding income tax, determine the LIFO liquidation profit or loss, if any, for each of the three years. 3. Determine the effects of LIFO liquidation on cost of goods sold and net income for 2024, 2025, and 2026. Cansela's effective income tax rate is 25%.

Name: Cansela Corporation reports inventory and cost of goods sold based on
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Description: Cansela Corporation reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. Thecompany began 2024 with inventory of 7,600 units of its only product. The beginning inventory balance of $107,200 consisted

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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