Inventory method for income tax purposes

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Reference no: EM13916140

Units	Unit Cost	Total Cost
Beginning Inventory		160,000	$2,00
Purchase #1		60,000	$2.25
Purchase #2		60,000	$1.90
Ending Inventory		30,000
Replacement cost on market			$2.20

2. Complete the following table ALL CALCULATIONS must be indicated via EXCEL formulas

Method:

Ending Inventory:$

COGS:$

FIFO

LIFO

Average Cost

3. Which Inventory method you recommend for reporting for income tax purposes? why?

4. The company is operating in an inflationary environment. Which method should the company use to maximize inventory valuation? why?

5,Should the replacement cost be used to value the ending inventory for any of the methods? Why?

Reference no: EM13916140

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