Reference no: EM133094939
Question - Using Alternative Method to Calculate the Cost of Goods Sold. Balent Appliances distributes a number of household appliances. One product, microwave ovens, has been selected for case purposes. Assume that the following summarized transactions were completed during the year ended December 31, 2020, in the order given (assume that a transactions are cash):
a. Beginning inventory: Units 11, Unit Cost $200
b. New inventory purchases Units 9, Unit Cost $220
c. Sales (selling price, $420): Units 8, Unit Cost -
Required -
(1) Using the FIFO method to calculate the CGS.
(2) Using the LIFO method to calculate the Ending Inventory.
(3) Assuming that inventory cost was expected to follow current trends, which method would you suggest that Balent select to account for these inventory items if manager wants to report more net income.
(3) Assuming that other operating expenses were $600 and the income tax rate is 20 percent, calculate the net income for the period using your selected method.
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