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
Chapter1: Financial Statements And Business Decisions
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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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