Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 10, Problem 10.6E
LIFO. Burke Company uses the LIFO perpetual method for financial reporting and tax purposes A summary of Burke's inventory for the current year follows.
| LIFO Inventory | ||||
| Description | Units | Unit Cost | Total Cost | Units Sold |
| Beginning inventory- January 1 | ||||
| First layer | 10,000 | $3.10 | $31,000 | |
| Second layer | 6,000 | 3,90 | 23,400 | |
| Total beginning inventory | 16,000 | $ 54,400 | ||
| Units sold on February 20 at $7.05 | 14,000 | |||
| Purchases or production: | ||||
| March 31 | 2,000 | 5,10 | 10,200 | |
| July 15 | 8,500 | 5,60 | 47,600 | |
| Units sold on December 1 at $7.25 | 11,000 | |||
| Cost of goods available for sale | 26,500 | $112,200 | ||
| Total units sold | (25,000) | |||
| Ending inventory: December 31 | 1,500 | |||
Required
- a. Compute the ending inventory and cost of goods sold for the current year.
- b. Prepare a partial income statement showing the gross profit for the current year.
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Chapter 10 Solutions
Intermediate Accounting
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