Patch Grove Nursery uses the LIFO inventory accounting method. Maria Hu", president, wants to determine the...
Patch Grove Nursery uses the LIFO inventory accounting method. Maria Hu", president, wants to determine the !nancial statement impact of changing to the FIFO accounting method. Selected company information follows:
Year-end inventory: $22,000 LIFO reserve: $4,000
Change in LIFO reserve: $1,000 LIFO cost of goods sold: $18,000
After-tax income: $2,000
Tax rate: 40%
Under FIFO, the nursery's ending inventory and after-tax pro!t for
the year would have been:
FIFO ending inventory FIDO after-tax profit
A) $18,000 $2,600
B) $26,000 $2,600
C) $26,000 $1,400
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Patch Grove Nursery uses the LIFO inventory accounting method.
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R.J
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Johnson Corporation began 2018
with inventory of 22,000 units of its only product. The units cost
$7 each. The company uses a periodic inventory system and the LIFO
cost method. The following transactions occurred during 2018:
Purchased 110,000 additional units at a cost of $12 per unit. Terms
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R.J
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Fantasy Fashions had used the LIFO method of costing inventories, but at the beginning of 2018 decided to change to the FIFO method. The inventory as reported at the end of 2017 using LIFO would have been $13 million higher using FIFO. Retained earnings reported at the end of 2016 and 2017 was $233 million and $253 million, respectively (reflecting the LIFO method). Those amounts reflecting the FIFO method would have been $243 million and $265 million, respectively. 2017 net...
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Purchased 110,000 additional units at a cost of $12 per unit. Terms
of the purchases were 2/10, n/30, and 100% of the purchases were
paid for within the 10-day discount period. The company uses the
gross method to record purchase discounts. The merchandise was...
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