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Inventory: January 1 Purchases: June 18 November 8 Units Unit Cost $9.00 10100 9000 6200 9.00 7.00

Inventory: January 1 Purchases: June 18 November 8 Units Unit Cost $9.00 10100 9000 6200 9.00 7.00

FINANCIAL ACCOUNTING
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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Waterway Company's inventory records show the following data: Inventory: January 1 Purchases: June 18 November 8 10100 Units O $1476 additional taxes O $2136 additional taxes O $2136 tax savings $2016 additional taxes 9000 6200 Unit Cost $9.00 9.00 A physical inventory on December 31 shows 4200 units on hand. Waterway sells the units for $14 each. The company has an effective tax rate of 24%. Waterway uses the periodic inventory method. What is the difference in taxes if LIFO rather than FIFO is used? 7.00
Transcribed Image Text:Waterway Company's inventory records show the following data: Inventory: January 1 Purchases: June 18 November 8 10100 Units O $1476 additional taxes O $2136 additional taxes O $2136 tax savings $2016 additional taxes 9000 6200 Unit Cost $9.00 9.00 A physical inventory on December 31 shows 4200 units on hand. Waterway sells the units for $14 each. The company has an effective tax rate of 24%. Waterway uses the periodic inventory method. What is the difference in taxes if LIFO rather than FIFO is used? 7.00
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