Homework Answers
15) Answer is Option b.
In a period of Inflation the cost flow method that results in the lowest income taxes is LIFO method.
16) Answer is Option c.
Inventory turnover is equal to Cost of goods sold divided by average inventory.
Average inventory is equal to Opening inventory plus Closing inventory divided by two.
So Average inventory is ($ 5000 + $ 8000) / 2 = $6500
Cost of goods sold is $ 23000
Average inventory is $23000/ $ 6500= 3.5 times.
Thank you.
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