What is the ending inventory value under lifo method

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In 20X1, Felix Company had sales revenues of $50m (10m units@ $5), all in cash. The beginning of the year inventory value was $9m (3m units@$3) Purchase during the year was $36m (9m units@ $4). Assume 40% income tax rate. Based on the above information, answer the following questions:

Question 1: What is the ending inventory value for 20X1 under 1) FIFO method and 2) LIFO method?

Question 2: What is the Cost of Goods Sold for 20X1 under 1) FIFO method and 2) LIFO method?

Question 3: What is the difference in tax expense for 20X1 between the LIFO and FIFO methods? Which method leads to higher taxes for 20X1?

Question 4: What is the difference in net income for 20X1 between the LIFO and FIFO methods? Which method leads to higher net income for 20X1?

Reference no: EM132582046

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