Question

+ 23. Nicholas Industries had the following inventory transactions occur during 2014: 22 Units Cost/unit 2/1/16 Purchase 54 $45 3/14/16 Purchase 93 $47 5/1/16 Purchase 66 $49 The company sold 140 units at $65 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's after-tax income using LIFO? (rounded to whole dollars)

Answer 1

Correct answer------------$1,672 or $ 1,671.60

Working

	LIFO
Sales revenue	$             9,100.00
Cost of goods sold	$             6,712.00
Gross profit	$             2,388.00
Tax	$                 716.40
After tax income	$             1,671.60

.

LIFO
Total Units Available for sale		213
Units Sold		140
Closing Stock in Units		73
Valuation
Ending Inventory	54	@	$             45.00	$ 2,430
	19	@	$             47.00	$ 893
Value Of Ending Inventory				$              3,323
Cost of Goods sold				$              6,712