Problem 8-9 (Algo) LIFO liquidation [LO8-4, 8-6] A company 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 2024 (listed in chronological order of acquisition): 12,880 units @ $10 17,800 units $15 Beginning inventory $ 120,000 255,889 $375,000 During 2024, 34,000 units were purchased for $20 per unit. Due to unexpected demand for the company's product. 2024 sales totaled 42,000 units at various prices, leaving 21,000 units in ending inventory. Required: 1. Calculate the amount to report for 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. Assume an income tax rate of 25% 3. If the company decided to purchase an additional 8,000 units at $20 per unit at the end of the year, how much Income tax currently payable would be saved? 1. Cost of goods sold 2. LIFO liquidation profit 3. Income tax payable Answer is complete but not entirely correct. s 800,000✔ $ 169,575 S 1,060,000
Problem 8-9 (Algo) LIFO liquidation [LO8-4, 8-6] A company 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 2024 (listed in chronological order of acquisition): 12,880 units @ $10 17,800 units $15 Beginning inventory $ 120,000 255,889 $375,000 During 2024, 34,000 units were purchased for $20 per unit. Due to unexpected demand for the company's product. 2024 sales totaled 42,000 units at various prices, leaving 21,000 units in ending inventory. Required: 1. Calculate the amount to report for 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. Assume an income tax rate of 25% 3. If the company decided to purchase an additional 8,000 units at $20 per unit at the end of the year, how much Income tax currently payable would be saved? 1. Cost of goods sold 2. LIFO liquidation profit 3. Income tax payable Answer is complete but not entirely correct. s 800,000✔ $ 169,575 S 1,060,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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am. 120.
![Problem 8-9 (Algo) LIFO liquidation [LO8-4, 8-6]
A company 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 2024 (listed in chronological order of acquisition):
12,880 units @ $le
17,880 units $15
Beginning inventory
$ 128,000
255,800
$375,000
During 2024, 34,000 units were purchased for $20 per unit. Due to unexpected demand for the company's product, 2024 sales
totaled 42,000 units at various prices, leaving 21,000 units in ending inventory.
Required:
1. Calculate the amount to report for 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. Assume an income tax rate of 25%
3. If the company decided to purchase an additional 8,000 units at $20 per unit at the end of the year, how much Income tax
currently payable would be saved?
1. Cost of goods gold
2. LIFO liquidation profit
3. Income tax payable
Answer is complete but not entirely correct.
S
800,000✔
s
169.575
s 1,060,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F803250dc-b926-4259-96eb-689366fc9bb6%2F0fdb2a1a-1f5d-48ec-a46c-6bedea58ee59%2Fohrb1rx_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 8-9 (Algo) LIFO liquidation [LO8-4, 8-6]
A company 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 2024 (listed in chronological order of acquisition):
12,880 units @ $le
17,880 units $15
Beginning inventory
$ 128,000
255,800
$375,000
During 2024, 34,000 units were purchased for $20 per unit. Due to unexpected demand for the company's product, 2024 sales
totaled 42,000 units at various prices, leaving 21,000 units in ending inventory.
Required:
1. Calculate the amount to report for 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. Assume an income tax rate of 25%
3. If the company decided to purchase an additional 8,000 units at $20 per unit at the end of the year, how much Income tax
currently payable would be saved?
1. Cost of goods gold
2. LIFO liquidation profit
3. Income tax payable
Answer is complete but not entirely correct.
S
800,000✔
s
169.575
s 1,060,000
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