What would be the effect of this purchase on income

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AAA Hardware uses the LIFO method to report its inventory. Inventory at the beginning of the year consisted of 23,000 units of the company's one product. These units cost $14 each. During the year, 73,000 units were purchased at a cost of $17 each and 80,500 units were sold. Near the end of the fiscal year, management is considering the purchase of an additional 9,000 units at $17.

Required:

Question 1. What would be the effect of this purchase on income before income taxes?

Question 2. What would be the effect of this purchase on income before income taxes using FIFO?

Reference no: EM132493514

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