Question:23M reports following for the month of April.Unit cost orsellingpriceDateExplanationUnits1-Apr Inventory120657-Apr Purchase707512-Apr Sale6013022-Apr Purchase708525-Apr Sale4014030-Apr Inventory160a) For each of the following assumptions, calculate (i) ending inventory, (ii) cost of goods sold& (iii) gross profit. [3*3]1. FIFO2. LIFO3. Average costb) Which method gives higher net income? Why? [0.5]c) Which method results in the higher income taxes? Why? [0.5]

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Description: Question:23M reports following for the month of April.Unit cost orsellingpriceDateExplanationUnits1-Apr Inventory120657-Apr Purchase707512-Apr Sale6013022-Apr Purchase708525-Apr Sale4014030-Apr Inventory160a) For each of the following assumptions, c

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Question:2 3M reports following for the month of April. Unit cost or Units selling price Date Explanation 1-Apr Inventory 120 65 7-Apr Purchase 70 75 12-Apr Sale 60 130 22-Apr Purchase 70 85 25-Apr Sale 40 140 30-Apr Inventory 160 a) For cach of the following assumptions, calculate (i) ending inventory, (ii) cost of goods sol & (iii) gross profit. [3*3] 1. FIFO 2. LIFO 3. Average cost b) Which method gives higher net income? Why? [0.5] c) Which method results in the higher income taxes? Why? [0.5]

Question:2 3M reports following for the month of April. Unit cost or Units selling price Date Explanation 1-Apr Inventory 120 65 7-Apr Purchase 70 75 12-Apr Sale 60 130 22-Apr Purchase 70 85 25-Apr Sale 40 140 30-Apr Inventory 160 a) For cach of the following assumptions, calculate (i) ending inventory, (ii) cost of goods sol & (iii) gross profit. [3*3] 1. FIFO 2. LIFO 3. Average cost b) Which method gives higher net income? Why? [0.5] c) Which method results in the higher income taxes? Why? [0.5]

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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