Homework Questions and Answers
for All Subjects

Here, you can freely access questions and answers from various subjects.
Our goal is to assist all learners in need. It is constantly being updated.

New Questions

Problem 1: Textbook problem M6-18 (page 6-39) (Please refer to the textbook - 'Financial Accounting for MBAs" by Easton et al.) Assume 1,600 units are sold, instead of 2,000 given in the book. Also assume that the income tax rate is at 40% flat. Fill the answer below: LO6-1 M6-18. Computing Cost of Goods Sold and Ending Inventory Under FIFO, LIFO, and Average Cost Assume that Madden Company reports the following initial balance and subsequent purchase of inventory. Inventory begins at beginning of year, Inventory purchased during the year. 1,300 units 150 each 1,700 units 180 each 195,000 306,000 Cost of goods available for sale during the year. 3,000 units 501,000 b. LIFO cost of goods sold = Inventory Purchases: Beginning Inventory: 1,300 units at 150 = 195,000 Purchases: 1,700 units at 180 each = 306,000 Total Units Available for Sale: 3,000 units Units Sold: 1,600 units COGS under LIFO: From the last 1,700 units purchased at 180, we sell 1,600 units (all from this layer). Total LIFO COGS = 1,600 units x 180 = 288,000 LIFO ending inventories = After selling 1,600 units, the remaining inventory will consist of 3,000 (total units available) - 1,600 (units sold) = 1,400 remaining inventory After selling all 1,600 units from the recent purchase at 180, there will still be 100 out of the original 1,700 units left at 180. Plus we have the 1,300 units at 150 (all that remain). Total Value of Ending Inventory: (100 units x 180) + (1,300 units x 150) = 18,000 + 195,000 = 213,000. LIFO Ending Inventories = 213,000 Problem 2: Follow-up to Problem 1 (above): Assume in the next year (Year 2), assume that Madden Corp purchases 1,500 units of inventory at a unit price of 170 and sold 2,000 units. For this second year, answer the following questions: a.) LIFO cost of goods sold = b.) LIFO ending inventories =