Problem 8-9 (Algo) LIFO liquidation (LO8-4, 8-6]Taylor Corporation reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. Thecompany's records under this system reveal the following inventory layers at the beginning of 2021 (listed in chronological order ofacquisition:20,000 units @ $2025,000 units @ $25Beginning inventory$400,000625,000$1,025,000During 2021, 50,000 units were purchased for $30 per unit. Due to unexpected demand for the company's product, 2021 sales totaled61,000 units at various prices, leaving 34,000 units in ending inventory.Required:1. Calculate the amount to report for cost of goods sold for 2021.2. Determine the amount of LIFO liquidation profit that the company must report in a disclosure note to its 2021 financial statements.Assume an income tax rate of 25%.3. If the company decided to purchase an additional 11,000 units at $30 per unit at the end of the year, how much income tax currentlypayable would be saved?1. Cost of goods sold2. LIFO liquidation profit3. Income tax payable

1. Cost of Goods Sold (COGS) for 2021: To calculate COGS, we need to sum up the cost of goods sold…

Answered: Problem 8-9 (Algo) LIFO liquidation…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

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Chapter1: Financial Statements And Business Decisions

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