Pacific Company sells electronic test equipment that it acquires from a foreign source. During the year, the inventory records reflected the following: Beginning inventory Purchases Sales (48 units at $24,668 each) Units 21 48 P7-4 Part 3 Unit Cost $11,560 18,068 Inventory is valued at cost using the LIFO inventory method. Total Cost $ 242,760 402,400 3a. How much did pretax income change because of the decision on December 31, current year? 3b. Assuming that the unit cost of test equipment is expected to continue to decline during the following year, is there any evidence of income manipulation?

Pacific Company sells electronic test equipment that it acquires from a foreign source. During the year, the inventory records reflected the following: Beginning inventory Purchases Sales (48 units at $24,668 each) Units 21 48 P7-4 Part 3 Unit Cost $11,560 18,068 Inventory is valued at cost using the LIFO inventory method. Total Cost $ 242,760 402,400 3a. How much did pretax income change because of the decision on December 31, current year? 3b. Assuming that the unit cost of test equipment is expected to continue to decline during the following year, is there any evidence of income manipulation?

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Description: Pacific Company sells electronic test equipment that it acquires from a foreign source. During the year, the inventoryrecords reflected the following:Beginning inventoryPurchasesSales (48 units at $24,668 each)P7-4 Part 3Inventory is valued at cost

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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