1. Use the format in Exhibit 9-1 to compute the ending FIFO inventory and cost of goods sold assuming:
$550,000 in sales
Beginning inventory 1125 units @ $175
Purchases of 890 units @ $150
450 units @ $165
200 units @ $140
Ending inventory 892 units
Ending FIFO inventory value:
Cost of Goods Sold:
Cost of Goods Sold Percentage of Sales:
2. Use the format in Exhibit 9-2 to compute the same items using the same assumptions.
Ending LIFO inventory value:
Cost of Goods Sold
Cost of Goods Sold Percentage of Sales:
Which statement best describes the difference in outcomes between the LIFO and FIFO methods for the scenario in this assignment?
A. There was no difference in the value of the ending inventory between the two methods.
B. There are no year end tax implications for chosing either the FIFO or LIFO methods.
C. The LIFO method saves the company money.
D. The FIFO method saves the company money.