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

1. a. Compute the ending inventory and cost of goods sold for the current year.
2. b. Prepare a partial income statement showing the gross profit for the current year.