Towing Company employs a periodic inventory system and sells its inventory to customers for $34 per unit. Towing Company had the following inventory information available for the month of May: May 1 Beginning inventory 2,200 units @ $17 cost per unit May 8 Sold 1,700 units May 13 Purchased 1,800 units @ $13 cost per unit May 18 Sold 1,600 units May 21 Purchased 1,300 units @ $23 cost per unit May 22 Purchased 1,100 units @ $15 cost per unit May 28 Sold 1,300 units May 30 Purchased 1,600 units @ $10 cost per unit During May, Towing Company reported operating expenses of $49,000 and had an income tax rate of 32%. Calculate the amount of gross profit earned by Towing Company during May using the LIFO method.
Units | Rate | Amount | |
Sale from May 30 purchase | 1,600 | $ 10 | $ 16,000 |
Sale from May 22 purchase | 1,100 | $ 15 | $ 16,500 |
Sale from May 21 Purchase | 1,300 | $ 23 | $ 29,900 |
Sale from May 13 Purchase | 600 | $ 13 | $ 7,800 |
Cost of goods sold | 4,600 | $ 70,200 |
Sales (4,600*$34) | $ 156,400 |
Less: Cost of goods sold | $ (70,200) |
Gross profit under FIFO Method | $ 86,200 |
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Towing Company employs a periodic inventory system and sells its inventory to customers for $34 per...
Towing Company employs a periodic inventory system and sells its inventory to customers for $34 per unit. Towing Company had the following inventory information available for the month of May: May 1 Beginning inventory 2,200 units @ $17 cost per unit May 8 Sold 1,700 units May 13 Purchased 1,800 units @ $13 cost per unit May 18 Sold 1,600 units May 21 Purchased 1,300 units @ $23 cost per unit May 22 Purchased 1,100 units @ $15 cost per...
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