Solution-Calculate the amount to report for cost of goods

Calculate the amount to report for cost of goods sold

Reference no: EM132426847

Question - 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):

16,500 units @ $10 - $165,000

21,500 units @ $15 - 322,500

Beginning inventory - $487,500

During 2021, 43,000 units were purchased for $20 per unit. Due to unexpected demand for the company's product, 2021 sales totaled 53,000 units at various prices, leaving 28,000 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 10,000 units at $20 per unit at the end of the year, how much income tax currently payable would be saved?

Reference no: EM132426847

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Calculate the amount to report for cost of goods sold

Reference no: EM132426847

Reference no: EM132426847

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