subject
Business, 04.11.2020 22:00 11132772

The management of Patel Co. is reevaluating the appropriateness of using its present inventory cost flow method, which is average-cost. They request

your help in determining the results of operations for 2019 if either the FIFO

method or the LIFO method had been used. For 2019, the accounting

records show the following data.

Inventories Purchases and

Sales

Beginning (15,000 units) $32,000

Total net sales (217,000 units)

$865,000

Ending (28,000 units)

Total cost of goods purchased

(230,000 units) 600,000

Purchases were made quarterly as follows.

Quarter Units Unit Cost Total Cost

1 60,000 $2.40 $144,000

2 50,000 2.50 125,000

3 50,000 2.70 135,000

4 70,000 2.80 196,000

Total 230,000 $600,000

Operating expenses were $147,000, and the company’s income tax rate is

34%.

Instructions

(a) Prepare comparative condensed income statements for 2019 under

FIFO and LIFO. (Show computations of ending inventory.)

(b) Answer the following questions for management.

(1) Which cost flow method (FIFO or LIFO) produces the more

meaningful inventory amount for the balance sheet? Why?

(2) Which cost flow method (FIFO or LIFO) produces the more

meaningful net income? Why?

ansver
Answers: 1

Another question on Business

question
Business, 22.06.2019 00:00
Alandlord rented an art studio to an artist. under the terms of the signed, written, two-year lease, the artist agreed to pay the landlord $1,000 per month and to assume responsibility for all necessary repairs. after the first year of the lease, the artist assigned the balance of his lease to a sculptor. the landlord approved the sculptor as a tenant and accepted two rent payments from her, and then the landlord sold the building to an investor. the sculptor had made two payments to the investor when an electrical fire broke out in the studio, injuring the sculptor. the fire was caused by faulty wiring. the landlord was aware that there was a dangerous wiring problem when he leased the property to the artist. but when the landlord discovered how costly repairs would be, he decided it would be more profitable to sell the property than to repair it. the problem was not easily discoverable by anyone other than an expert electrician, and the landlord did not tell the artist, the sculptor, or the investor about the problem. the sculptor sues to recover damages for her injuries. from whom can the sculptor recover?
Answers: 3
question
Business, 22.06.2019 02:00
Keshawn used to work for an it company in baltimore, but lost his job when his company decided to use workers in new delhi instead. this is an example of:
Answers: 1
question
Business, 22.06.2019 03:30
Diversified semiconductors sells perishable electronic components. some must be shipped and stored in reusable protective containers. customers pay a deposit for each container received. the deposit is equal to the container’s cost. they receive a refund when the container is returned. during 2018, deposits collected on containers shipped were $856,000. deposits are forfeited if containers are not returned within 18 months. containers held by customers at january 1, 2018, represented deposits of $587,000. in 2018, $811,000 was refunded and deposits forfeited were $41,000. required: 1. prepare the appropriate journal entries for the deposits received and returned during 2018. 2. determine the liability for refundable deposits to be reported on the december 31, 2018, balance sheet.
Answers: 1
question
Business, 22.06.2019 08:00
Why do police officers get paid less than professional baseball players?
Answers: 2
You know the right answer?
The management of Patel Co. is reevaluating the appropriateness of using its present inventory cost...
Questions
question
Mathematics, 10.09.2020 06:01
question
Mathematics, 10.09.2020 06:01
question
Mathematics, 10.09.2020 06:01
question
Geography, 10.09.2020 06:01
question
Mathematics, 10.09.2020 06:01
question
Mathematics, 10.09.2020 06:01
question
Mathematics, 10.09.2020 06:01
question
Social Studies, 10.09.2020 06:01
question
English, 10.09.2020 06:01
question
Mathematics, 10.09.2020 06:01
question
Mathematics, 10.09.2020 06:01
question
Mathematics, 10.09.2020 06:01
question
Mathematics, 10.09.2020 06:01
question
Mathematics, 10.09.2020 06:01
question
Mathematics, 10.09.2020 06:01
question
Mathematics, 10.09.2020 06:01
question
Social Studies, 10.09.2020 06:01
question
English, 10.09.2020 06:01
question
Mathematics, 10.09.2020 06:01
question
Biology, 10.09.2020 06:01