Cansela Corporation reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. Thecompany began 2021 with inventory of 4,500 units of its onlly product. The beginning inventory balance of $64,000 consisted of thefollowing layers:$ 24,0002,000 units at $12 per unit2,500 units at $16 per unit40,000$ 64,000Beginning inventoryDuring the three years 2021-2023 the cost of inventory remained constant at $18 per unit. Unit purchases and sales during theseyears were as follows:PurchasesSales10,00011,00020212022202313,00014,50013,00012,000Required:1. Calculate cost of goods sold for 2021, 2022, and 2023.2. 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 2021, 2022, and 2023. Cansela's effectiveincome tax rate is 25% Required 1Required 3Required 2Determine the effects of LIFO liquidation on cost of goods sold and net income for 2021, 2022, and 2023. Cansela's effectiveincome tax rate is 25%.Cost of Goods SoldNet Incomedecreasedbybybybybyby2021increaseddecreasedincreased2022decreased2023increased

Under the LIFO method, the goods which are purchased in the last are sold first. The ending…

Answered: Cansela Corporation reports inventory…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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Bettencourt Clothing Corporation uses a periodic inventory system and the LIFO cost method. The company began 2024 with the following inventory layers (listed in chronological order of acquisition): 5,200 units @ $12 per unit 8,200 units @ $14 per unit Beginning inventory $ 62,400 114,800 $ 177,200 During 2024, 20,200 units were purchased for $16 per unit. Sales for the year totaled 30,400 units at various prices, leaving 3,200 units in ending inventory. Required: 1. Calculate 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, assuming the amount is material. Assume an income tax rate of 25%. Cost of goods sold LIFO liquidation profit
Altira Corporation provides the following information related to its inventory during the month of August 2024: August 1 Inventory on hand-2,900 units; cost $7.00 each. August 8 Purchased 14,500 units for $6.40 each. August 14 Sold 11,600 units for $12.90 each. August 18 Purchased 8,700 units for $6.00 each. August 25 Sold 10,600 units for $11.90 each. August 28 Purchased 4,900 units for $5.80 each. August 31 Inventory on hand-8,800 units. Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2024, balance sheet and the cost of goods sold it would report in its August 2024 income statement using last-in, first-out (LIFO). Cost of Goods Available for Sale Cost of Goods Sold - August 14 Cost of Goods Sold - August 25 Inventory Balance Perpetual LIFO: Number of units Cost per unit Cost of Goods Available for Sale Number of Cost Cost of units sold per unit Goods Sold Number of units sold Cost per unit Cost of Goods…
On January 1, 2021, the National Furniture Company adopted the dollar-value LIFO method of computing inventory. An internal cost index is used to convert ending inventory to base year. Inventory on January 1 was $200,000. Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows: Year EndedDecember 31 Inventory atYear-endCosts Cost Index(Relative toBase Year) 2021 $ 259,200 1.08 2022 296,800 1.12 2023 299,000 1.15 Required:Compute inventory amounts at the end of each year using the dollar-value LIFO method. 12/31/2021 12/31/2022 12/31/2023
A company uses the dollar-value LIFO method of computing inventory. An external price index is used to convert ending inventory to base year. The company began operations on January 1, 2024, with an inventory of $120,000 Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows: Year Ended December 31 2024 2025 2026 2027 Date Required: Calculate inventory amounts at the end of each year Note: Round intermediate calculations and final answers to the nearest whole dollars. 01/01/2024 12/31/2024 12/31/2025 12/31/2026 Ending Inventory at Cost Index (Relative to Year-End Costs Base Year) $ 198,000 261,800 243,600 240,800 12/31/2027 Inventory Layers Converted to Base Year Cost Inventory at Year End Cost Inventory Layers at Base Year Cost Inventory Layers Converted to Cost Inventory Layers Converted to Cost Base Base 2024 Base 2024 2025 Base 1.10 1.19 1.16 1.12 2024 2025 2026 Base 2024 2025 2026 2027 Inventory Layers at Base Year Cost Inventory DVL…
Based on our understanding of inventory cost flows, and given the information listed below for the company's fiscal year 2018, determine beginning inventory in 2018. A physical count indicated that there was $30,000 of inventory on hand at December 31, 2018 (i.e., ending inventory). Sales $317,000 Freight In Purchase Returns and Allowances $7,000 $8,000 Sales Returns $9,000 Purchase Discounts $4,000 Purchases $245,000 Gross Profit $75,000 Sales Discounts $1,000 Select one: a. $36,000 b. $29,000 c. $21,000 d. $32,000 e. $22,000
Sagar
Kiddie World uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the quarter ending September 30, 2021: Cost Retail Beginning inventory $ 320,000 $ 465,000 Net purchases 863,000 1,230,000 Freight-in 24,500 Net markups 50,000 Net markdowns 20,000 Net sales 1,210,000 Estimate ending inventory and cost of goods sold using the conventional method. (Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.))
Altira Corporation provides the following information related to its inventory during the month of August 2024: August 1 Inventory on hand—2,300 units; cost $6.40 each. August 8 Purchased 11,500 units for $5.80 each. August 14 Sold 9,200 units for $12.30 each. August 18 Purchased 6,900 units for $5.00 each. August 25 Sold 8,200 units for $11.30 each. August 28 Purchased 4,300 units for $5.80 each. August 31 Inventory on hand—7,600 units. 1. Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2024, balance sheet and the cost of goods sold it would report in its August 2024 income statement using the FIFO method.
Balamb Corporation had the following transactions for the month: Calculate the ending inventory dollar value for the period for each of the following cost allocation methods, using periodic inventory updating. Provide your calculations. first-in, first-out (FIFO) last-in, first-out (LIFO) weighted average
The 2021 inventory data for Island Corporation is presented below. Assume that Island uses periodic inventory tracking. 2021 Beginning Inventory (purchased in 2020) 100 units @ $28 per unit Purchases: Purchase 1 on 1/20/21 300 units @ $30 per unit Purchase 2 on 6/15/21 1,100 units @ $34 per unit Sales: Sale 1 on 4/8/21 520 units @ $60 per unit Sale 2 on 9/25/21 860 units @ $60 per unit When Island examines the actual units in ending inventory, they see that 30 of the units are from 2021 beginning inventory, 40 units are from the 1/20/21 purchase, and 50 units are from the 6/15/21 purchase. What is Inventory on the 12/31/21 Balance Sheet if Island uses FIFO? $3,400 $4,080 $45,120 $45,800 What is Cost of Goods Sold on the 2021 Income Statement if Island uses LIFO? $3,400 $4,080 $45,120 $45,800 What is Inventory on the 12/31/21 Balance Sheet if Island…
Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021: Aug.1 Inventory on hand—4,000 units; cost $7.30 each. 8 Purchased 20,000 units for $7.50 each. 14 Sold 16,000 units for $14.00 each. 18 Purchased 12,000 units for $7.60 each. 25 Sold 15,000 units for $13.00 each. 28 Purchased 6,000 units for $5.80 each. 31 Inventory on hand—11,000 units. Required:Using calculations based on a periodic inventory system, determine the inventory balance Altira would report in its August 31, 2021, balance sheet and the cost of goods sold it would report in its August 2021 income statement using FIFO.
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?

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