Reference no: EM133168059
Question - The Ames Company has exactly $60 in cash. The company buys three pieces of inventory which are all exactly the same for cash. Because it is a highly inflationary market, the first one cost $16, the second cost $19, and the third cost $25. Shortly thereafter, one of these three is sold for $40 cash. Answer each of the following questions.
1. If FIFO is applied, how many units are now on hand?
2. If LIFO is applied, how many units are now on hand?
3. If FIFO is applied, how much cash is the company holding?
4. If LIFO is applied, how much cash is the company holding?
5. If FIFO is applied, what appears on the income statement and the balance sheet?
6. If LIFO is applied, what appears on the income statement and the balance sheet?