Reference no: EM132621322
Question - Taylor Corporation reports inventory and cost of goods sold based on calculations from 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):
19,000 units @ $15 = $285,000
24,000 units @ $20 = $480,000
Beginning inventory = $765,000
During 2021, 48,000 units were purchased for $25 per unit. Due to unexpected demand for the company's product, 2021 sales totaled 59,000 units at various prices, leaving 32,000 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.
3. If the company decided to purchase an additional 11,000 units at $25 per unit at the end of the year, how much income tax currently payable would be saved?
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