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In: Accounting
Problem 8-10 (Algo) LIFO liquidation [LO8-4, 8-6] Cansela Corporation reports inventory and cost of goods sold...
Problem 8-10 (Algo) LIFO liquidation [LO8-4, 8-6]
Cansela Corporation reports inventory and cost of goods sold
based on calculations from a LIFO periodic inventory system. The
company began 2021 with inventory of 6,800 units of its only
product. The beginning inventory balance of $82,000 consisted of
the following layers:
| 3,300 units at $10 per unit | = | $ | 33,000 | |
| 3,500 units at $14 per unit | = | 49,000 | ||
| Beginning inventory | $ | 82,000 | ||
During the three years 2021–2023 the cost of inventory remained
constant at $16 per unit. Unit purchases and sales during these
years were as follows:
| Purchases | Sales | |
| 2021 | 29,500 | 31,000 |
| 2022 | 39,000 | 41,000 |
| 2023 | 31,500 | 32,600 |
Required:
1. Calculate cost of goods sold for 2021, 2022,
and 2023.
2. Disregarding income tax, determine the LIFO
liquidation profit or loss, if any, for each of the three
years.
3. Determine the effects of LIFO liquidation on
cost of goods sold and net income for 2021, 2022, and 2023.
Cansela’s effective income tax rate is 25%.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Taylor Corporation reports inventory and cost of goods sold based on calculations from a LIFO periodic...
Taylor Corporation reports inventory and cost of goods sold
based on calculations from a LIFO periodic inventory system. The
company’s records under this system reveal the following inventory
layers at the beginning of 2021 (listed in chronological order of
acquisition):
15,000 units @ $10
$
150,000
20,000 units @ $15
300,000
Beginning inventory
$
450,000
During 2021, 40,000 units were purchased for $20 per unit. Due to
unexpected demand for the company's product, 2021 sales totaled
49,000 units at various...
Taylor Corporation reports inventory and cost of goods sold based on calculations from a LIFO periodic...
Taylor Corporation reports inventory and cost of goods sold
based on calculations from a LIFO periodic inventory system. The
company’s records under this system reveal the following inventory
layers at the beginning of 2021 (listed in chronological order of
acquisition):
15,000 units @ $10
$
150,000
20,000 units @ $15
300,000
Beginning inventory
$
450,000
During 2021, 40,000 units were purchased for $20 per unit. Due to
unexpected demand for the company's product, 2021 sales totaled
49,000 units at various...
Cansela Corporation reports inventory and cost of goods sold based on calculations from a LIFO periodic...
Cansela Corporation reports inventory and cost of goods sold
based on calculations from a LIFO periodic inventory system. The
company began 2021 with inventory of 7,000 units of its only
product. The beginning inventory balance of $88,000 consisted of
the following layers:
2,500 units at $10 per unit
=
$
25,000
4,500 units at $14 per unit
=
63,000
Beginning inventory
$
88,000
During the three years 2021–2023 the cost of inventory remained
constant at $16 per unit....
Taylor Corporation reports inventory and cost of goods sold based on calculations from a LIFO periodic...
Taylor Corporation reports inventory and cost of goods sold
based on calculations from a LIFO periodic inventory system. The
company’s records under this system reveal the following inventory
layers at the beginning of 2021 (listed in chronological order of
acquisition):
10,000 units @ $15
$
150,000
15,000 units @ $20
300,000
Beginning inventory
$
450,000
During 2021, 30,000 units were purchased for $25 per unit. Due to
unexpected demand for the company’s product, 2021 sales totaled
40,000 units at various...
Taylor Corporation reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system.
Taylor Corporation reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. The company’s records under this system reveal the following inventory layers at the beginning of 2021 (listed in chronological order of acquisition):
10,000 units @ $15..........................$150,000
15,000 units @ $20............................300,000
Beginning inventory........................$450,000
During 2021, 30,000 units were purchased for $25 per unit. Due to unexpected demand for the company’s product, 2021 sales totaled 40,000 units at various prices, leaving 15,000 units in...
Problem 8-31 (Algo) Completing a Master Budget [LO8-2, LO8-4, LO8-7, LO8-8, LO8-9, LO8-10] Hillyard Company, an...
Problem 8-31 (Algo) Completing a Master Budget [LO8-2, LO8-4,
LO8-7, LO8-8, LO8-9, LO8-10]
Hillyard Company, an office supplies specialty store, prepares
its master budget on a quarterly basis. The following data have
been assembled to assist in preparing the master budget for the
first quarter:
As of December 31 (the end of the prior quarter), the company’s
general ledger showed the following account balances:
Cash
$
59,000
Accounts receivable
215,200
Inventory
60,600
Buildings and equipment (net)
369,000
Accounts payable
$...
Problem 8-27 (Algo) Cash Collections; Cash Disbursements; Budgeted Balance Sheet [LO8-2, LO8-3, LO8-4, LO8-10] Deacon Company...
Problem 8-27 (Algo) Cash Collections; Cash Disbursements;
Budgeted Balance Sheet [LO8-2, LO8-3, LO8-4, LO8-10]
Deacon Company is a merchandising company that is preparing a
budget for the three-month period ended June 30th. The following
information is available
Deacon Company
Balance Sheet
March 31
Assets
Cash
$
58,200
Accounts receivable
34,800
Inventory
68,500
Buildings and equipment, net of depreciation
118,000
Total assets
$
279,500
Liabilities and Stockholders’
Equity
Accounts payable
$
95,000
Common stock
70,000
Retained earnings
114,500
Total liabilities and...
Calculate the cost of goods sold and the cost of the ending inventory using the LIFO...
Calculate the cost of goods sold and the cost of the ending
inventory using the LIFO periodic cost flow assumption.
Sales 97 units at $ 18 per unit
Beginning inventory 88 units at $ 6 per unit
Purchases 58 units at $ 10 per unit
Calculate the cost of goods sold using the LIFO periodic cost
flow assumption. Units x Cost per Unit = Total Cost Units from
beginning inventory x = Units from purchase x = Cost of Goods...
Required information Problem 8-5 (Algo) Various inventory costing methods [LO8-1, 8-4] Skip to question [The following...
Required information
Problem 8-5 (Algo) Various inventory costing methods [LO8-1,
8-4]
Skip to question
[The following information applies to the questions
displayed below.]
Ferris Company began January with 7,000 units of its principal
product. The cost of each unit is $6. Merchandise transactions for
the month of January are as follows:
Purchases
Date of Purchase
Units
Unit Cost*
Total Cost
Jan. 10
6,000
$
7
$
42,000
Jan. 18
7,000
8
56,000
Totals
13,000
98,000
* Includes purchase price and...
Brief Exercise 8-8 LIFO method [LO8-4] Esquire Inc. uses the LIFO method to value its inventory....
Brief Exercise 8-8 LIFO method [LO8-4]
Esquire Inc. uses the LIFO method to value its inventory.
Inventory at January 1, 2018, was $500,000 (25,000 units at $20
each). During 2018, 90,000 units were purchased, all at the same
price of $27 per unit. 95,000 units were sold during 2018. Esquire
uses a periodic inventory system.
Complete the below table to calculate the December 31, 2018, ending
inventory and cost of goods sold for 2018.
Cost of Goods Available for
Sale...
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