Chapter 6, Problem 6.20AE

 LO 2

(Learning Objective 2: Compare ending inventory and cost of goods sold—FIFO vs. LIFO) Woody’s specializes in sound equipment. Company records indicate the following data for a line of speakers:

Requirements

  1.    Determine the amounts that Woody’s should report for cost of goods sold and ending inventory two ways:

  a.    FIFO

  b.    LIFO

  2.    Woody’s uses the FIFO method. Prepare the company’s income statement for the month ended March 31, 2018, reporting gross profit. Operating expenses totaled $330, and the income tax rate was 35%.