Compute inventory book and tax differences

Assignment Help Financial Accounting

Reference no: EM131221959

In its first year of operations, Lima Company manufactured 1,000 widgets, incurring direct materials and labor costs of $227,000. For book purposes, Lima captialized $260,000 of indirect manufacturing costs. For tax purposes, it had to capitalize $315,000 of indirect costs under the UNICAP rules. At the end of the year, Lima had 170 widgets remaining in inventory.

a. For book purposes, compute Lima's ending inventory cost and cost of goods sold for the year.

b. For tax purposes, compute Lima's ending inventory cost and cost of good sold for the year.

c. Compute Lima's inventory book/tax differences and indicate if such difference is favorable or unfavorable.

Reference no: EM131221959

Questions Cloud

Meaning of green computing : What is the meaning of "Green Computing," gather statistics, or develop a list of ways to practice green computing; now expand the discussion to determine if Green Computing is possible, if it can make a difference,

What is the total manufacturing cost assigned to job : Mickley Company’s predetermined overhead rate is $23.00 per direct labor-hour and its direct labor wage rate is $15.00 per hour. The following information pertains to Job A-500: Direct materials $210 Direct labor $150. What is the total manufacturing..

How you might extend the star-cubing algorithm : Discuss how you might extend the Star-Cubing algorithm to compute iceberg cubes where the iceberg condition tests for an avg that is no bigger than some value, v.

How do we heal medicine : View Atul Gawande''s TED Talk, How Do We Heal Medicine? Which of the models, cowboys or pit crews, would you advocate for as a healthcare manager? Provide some positives and negatives of each model.

Compute inventory book and tax differences : In its first year of operations, Lima Company manufactured 1,000 widgets, incurring direct materials and labor costs of $227,000. For book purposes, Lima captialized $260,000 of indirect manufacturing costs. Compute Lima's inventory book/tax differen..

What conflicts must conoco resolve : What conflicts must Conoco resolve in deciding whether or not to develop block 16 in Ecuador's tropical rain forest. How can Conoco achieve the necessary consensus to move forward? Would you recommend that Conoco do so on this basis?

How much interest expense will be recognized under IFRS : The Evermaster Co. issues at par a $100,000 8% bond on Jan. 1, 2010 which matures after 5 years. Bond issue costs are $7721.73 . The bond pays interest on July 1 and Jan 1. How much interest expense will be recognized under IFRS for the six month per..

Design an efficient incremental update algorithm : The sampling cube was proposed for multidimensional analysis of sampling data (e.g., survey data). In many real applications, sampling data can be of high dimensionality (e.g., it is not unusual to have more than 50 dimensions in a survey data set..

Explain how does lifo subtract inflation from inventory cost : How does LIFO subtract inflation from inventory costs? Explain how the cash flow of $174,400 in this example was computed. Explain why this amount may not be correct.

User Account

All Pages