Question

1. FIFO –LIFO - Please type answers

The Inventory Company has provided you with three months of their inventory and purchases for the last three months:

Date	Item	Quantity	Unit Price
July 1	Begin Inventory	2,500	$38
July 15	Purchase	3,300	$37
July 29	Purchase	5,500	$36
Aug 11	Purchase	4,100	$36
Aug 30	Purchase	6,700	$35
Sept 14	Purchase	3,900	$34

During three months the company sold 18,200 units. Selling price is $78 and the company’s tax rate is 32%.

Required:

A. Complete the worksheet for FIFO, LIFO and the income statement for the above information – similar to the example we completed in class and also posted on the Excel worksheet created during this week’s class.

Example --- Worksheet for FIFO and LIFO

Date	Item	Qty	Unit $	Total $		End Inventory	CGS

B. Complete the required income statement comparison, as we did in class.

	FIFO	LIFO
Sales $$
CGS (Cost of Goods Sold)
Gross Profit
Income Tax
Profit after Taxes

C. Explain which method you would recommend that the company should use and explain the reason for your decision.

Answer 1