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Bettencourt Clothing Corporation uses a periodic inventory system and the LIFO cost method. The company began 2024 with the following inventory layers (listed in chronological order of acquisition): 5,200 units @ $12 per unit 8,200 units @ $14 per unit Beginning inventory $ 62,400 114,800 $ 177,200 During 2024, 20,200 units were purchased for $16 per unit. Sales for the year totaled 30,400 units at various prices, leaving 3,200 units in ending inventory. Required: 1. Calculate cost of goods sold for 2024. 2. Determine the amount of LIFO liquidation profit that the company must report in a disclosure note to its 2024 financial statements, assuming the amount is material. Assume an income tax rate of 25%. Cost of goods sold LIFO liquidation profit

Bettencourt Clothing Corporation uses a periodic inventory system and the LIFO cost method. The company began 2024 with the following inventory layers (listed in chronological order of acquisition): 5,200 units @ $12 per unit 8,200 units @ $14 per unit Beginning inventory $ 62,400 114,800 $ 177,200 During 2024, 20,200 units were purchased for $16 per unit. Sales for the year totaled 30,400 units at various prices, leaving 3,200 units in ending inventory. Required: 1. Calculate cost of goods sold for 2024. 2. Determine the amount of LIFO liquidation profit that the company must report in a disclosure note to its 2024 financial statements, assuming the amount is material. Assume an income tax rate of 25%. Cost of goods sold LIFO liquidation profit

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter7: Inventories: Cost Measurement And Flow Assumptions
Section: Chapter Questions
Problem 5MC: The moving average inventory cost flow assumption is applicable to which of the following inventory...
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Bettencourt Clothing Corporation uses a periodic inventory system and the LIFO cost method. The company began 2024 with the following inventory layers (listed in chronological order of acquisition): 5,200 units @ $12 per unit 8,200 units @ $14 per unit Beginning inventory $ 62,400 114,800 $ 177,200 During 2024, 20,200 units were purchased for $16 per unit. Sales for the year totaled 30,400 units at various prices, leaving 3,200 units in ending inventory. Required: 1. Calculate cost of goods sold for 2024. 2. Determine the amount of LIFO liquidation profit that the company must report in a disclosure note to its 2024 financial statements, assuming the amount is material. Assume an income tax rate of 25%. Cost of goods sold LIFO liquidation profit
Transcribed Image Text:Bettencourt Clothing Corporation uses a periodic inventory system and the LIFO cost method. The company began 2024 with the following inventory layers (listed in chronological order of acquisition): 5,200 units @ $12 per unit 8,200 units @ $14 per unit Beginning inventory $ 62,400 114,800 $ 177,200 During 2024, 20,200 units were purchased for $16 per unit. Sales for the year totaled 30,400 units at various prices, leaving 3,200 units in ending inventory. Required: 1. Calculate cost of goods sold for 2024. 2. Determine the amount of LIFO liquidation profit that the company must report in a disclosure note to its 2024 financial statements, assuming the amount is material. Assume an income tax rate of 25%. Cost of goods sold LIFO liquidation profit
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