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The MegaMart Company began 2024 with inventory of 18,000 units at a cost of $9 per unit. During 2024, 58,000 units were purchased for $10.40 each. Sales for the year totaled 66,000 units leaving 10,000 units on hand at the end of 2024. MegaMart uses a periodic inventory system and the LIFO inventory cost method. Required: Calculate cost of goods sold for 2024. Calculate the effect of the use of LIFO on Income.

The MegaMart Company began 2024 with inventory of 18,000 units at a cost of $9 per unit. During 2024, 58,000 units were purchased for $10.40 each. Sales for the year totaled 66,000 units leaving 10,000 units on hand at the end of 2024. MegaMart uses a periodic inventory system and the LIFO inventory cost method. Required: Calculate cost of goods sold for 2024. Calculate the effect of the use of LIFO on Income.

Financial Accounting
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter7: Inventories
Section: Chapter Questions
Problem 5PA
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The MegaMart Company began 2024 with inventory of 18,000 units at a cost of $9 per unit. During 2024, 58,000 units were purchased for $10.40 each. Sales for the year totaled 66,000 units leaving 10,000 units on hand at the end of 2024. MegaMart uses a periodic inventory system and the LIFO inventory cost method.

Required:

  1. Calculate cost of goods sold for 2024.
  2. Calculate the effect of the use of LIFO on Income.

 

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