Question

Blue Spruce Corp. had the following inventory transactions occur during 2017: Units Cost/unit Feb 1, 2017 Purchase 125 $52 Mar. 14, 2017 Purchase 216 $55 May 1, 2017 Purchase 153 The company sold 355 units at $73 each and has a tax rate of 30%. Assuming that a periodic Inventory system is used, and operating expenses of $2088, what is the company's after-tax income using LIFO?(rounded to whole dollars) $3254 $4649 $2797 $3996 e Textbook and Media Solution Save for Later Attempts: 1 of 2 used Submit Answer

Answer 1

Cost of Goods Sold under lifo

= (153*57)+(355-153)*55

= 8721 + 11,110 = 19831

Gross profit = Sales - Cost of Goods Sold

= (355*73) - 19831 = 6084

Operating income = 6084 - 2088 = 3998

After tax income = 3998 - 30%

= 2797