Reference no: EM132658801
Question - The management of Gresa Inc. is reevaluating the appropriateness of using its present inventory cost flow method, which is average-cost. The company requests your help in determining the results of operations for 2017 if either the FIFO or the LIFO method had been used. For 2017, the accounting records show these data:
Inventories Purchases and Sales
Beginning (7,000 units) $14,000
Total net sales (223,000 units) $992,350
Ending (14,000 units)
Total cost of goods purchased (230,000 units) 572,000
Purchases were made quarterly as follows.
Quarter Units Unit Cost Total Cost
160,000 $2.30 $138,000
250,000 2.40 120,000
350,000 2.50 125,000
470,000 2.70 189,000
230,000 $572,000
Required - Prepare comparative condensed income statements for 2017 under FIFO and LIFO.