Archer Industries prepares quarterly financial statements.During the fourthquarter the following occurred:Purchases:Quantity9,000 units*21,000 units24,000 units10,000 units64,000 unitsUnit ValueTotal Value$ 54,000168,000240,000160,000$622,000$6/u$8/uOct.1.Oct. 10Nov. 20$10/uDec. 30$16/uAvailable*Beginning InventorySales:Unit ValueQuantity11,000 units10,000 units31,000 units52,000 unitsTotal ValueOct. 18Nov. 12Dec. 21Units Sold18/u$198,000200,000|775,000$1,173,00020/u25/uThe taxSelling and administrative expenses for the period were $359, 000.rate is 30 percent.A. Calculate the value of ending inventory, the cost of goods sold, anddetermine reported income (after taxes) under theLIFO periodic method:Optional Work Space For CalculationsEndingInventoryCost ofGoods SoldNet IncomeAfter TaxesB. If the company had been on the FIFO method, how muchmore or less would it have paid in income taxes?C. Determine the maximum amount Archer could have improved itsreported 4th quarter income after taxes if it had delayed its finalpurchasing decision under FIFO or under LIFO until January.Improvement in IATFIFOLIFO

LIFO (Last-in-first Out): As the name itself suggests, the latest inventory and purchases will be…

Archer Industries prepares quarterly financial statements. During the fourth quarter the following occurred: Purchases: Unit Value $6/u $8/u $10/u $16/u Total Value $ 54,000 Quantity 9,000 units* @ 21,000 units 24,000 units 10,000 units 64,000 units Oct. 1 Oct. 10 168,000 240,000 160,000 $622,000 Nov. 20 Dec. 30 Available *Beginning Inventory Sales: Unit Value 18/u Quantity 11,000 units 10,000 units 31,000 units Units Sold 52,000 units Total Value $198,000 200,000| 775,000 $1,173,000 Oct. 18 Nov. 12 Dec. 21 20/u 25/u Selling and administrative expenses for the period were $359,000. The tax rate is 30 percent. A. Calculate the value of ending inventory, the cost of goods sold, and determine reported income (after taxes) under the LIFO periodic method: Optional Work Space For Calculations Ending Inventory Cost of Goods Sold Net Income After Taxes B. If the company had been on the FIFO method, how much more or less would it have paid in income taxes? c. Determine the maximum amount Archer could have improved its reported 4th quarter income after taxes if it had delayed its final purchasing decision under FIFO or under LIFO until January.

Archer Industries prepares quarterly financial statements. During the fourth quarter the following occurred: Purchases: Unit Value $6/u $8/u $10/u $16/u Total Value $ 54,000 Quantity 9,000 units* @ 21,000 units 24,000 units 10,000 units 64,000 units Oct. 1 Oct. 10 168,000 240,000 160,000 $622,000 Nov. 20 Dec. 30 Available *Beginning Inventory Sales: Unit Value 18/u Quantity 11,000 units 10,000 units 31,000 units Units Sold 52,000 units Total Value $198,000 200,000| 775,000 $1,173,000 Oct. 18 Nov. 12 Dec. 21 20/u 25/u Selling and administrative expenses for the period were $359,000. The tax rate is 30 percent. A. Calculate the value of ending inventory, the cost of goods sold, and determine reported income (after taxes) under the LIFO periodic method: Optional Work Space For Calculations Ending Inventory Cost of Goods Sold Net Income After Taxes B. If the company had been on the FIFO method, how much more or less would it have paid in income taxes? c. Determine the maximum amount Archer could have improved its reported 4th quarter income after taxes if it had delayed its final purchasing decision under FIFO or under LIFO until January.

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 67P

See similar textbooks

Similar questions

Johnson Corporation had beginning inventory of 20,000 at cost and 35,000 at retail. During the year, it made net purchases of 180,000 at cost and 322,000 at retail. Johnson nude sales of 300,000. Assuming a price index of 100 at the beginning of the year and 110 at the end of the year, compute Johnsons ending inventory at cost using the dollar-value LIFO retail method.
Shaquille Corporation began the current year with inventory of 50,000. During the year, its purchases totaled 110,000. Shaquille paid freight charges of 8,500 for those purchases. At the end of the year, Shaquille had inventory of 47,800. Prepare a schedule to determine Shaquille's cost of goods sold for the current year.
On January 1, Pope Enterprises inventory was 625,000. Pope made 950,000 of net purchases during the year. On its year-end income statement, Pope reported cost of goods sold of 1,025,000. Calculate Popes December 31 ending inventory.
Cost of goods sold and related items The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 20Y8: Estimated returns of current year sales 11,600 Inventory, May 1, 20Y7 380,000 Inventory, April 30, 20Y8 415,000 Purchases 3,800,000 Purchases returns and allowances 150,000 Purchases discounts 80,000 Sales 5,850,000 Freight in 16,600 a. Prepare the Cost of goods sold section of the income statement for the year ended April 30, 20Y8, using the periodic inventory system. b. Determine the gross profit to be reported on the income statement for the year ended April 30, 20Y8. c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory system?
Ranger Industries has provided the following information at June 30: Other information: Average selling price, 196 Average purchase price per unit, 110 Desired ending inventory, 40% of next months unit sales Collections from customers: In month of sale20% In month after sale50% Two months after sale30% Projected cash payments: Inventory purchases are paid for in the month following acquisition. Variable cash expenses, other than inventory, are equal to 25% of each months sales and are paid in the month of sale. Fixed cash expenses are 40,000 per month and are paid in the month incurred. Depreciation on equipment is 2,000 per month. REQUIREMENT You have been asked to prepare a master budget for the upcoming quarter (July, August, and September). The components of this budget are a monthly sales budget, a monthly purchases budget, a monthly cash budget, a forecasted income statement for the quarter, and a forecasted September 30 balance sheet. The worksheet MASTER has been provided to assist you. Ranger Industries desires to maintain a minimum cash balance of 8,000 at the end of each month. If this goal cannot be met, the company borrows the exact amount needed to reach its goal. If the company has a cash balance greater than 8,000 and also has loans payable outstanding, the amount in excess of 8,000 is paid to the bank. Annual interest of 18% is paid on a monthly basis on the outstanding balance.
Cost of goods sold Pine Creek Company completed 200,000 units during the year at a cost of 3,000,000. The beginning finished goods inventory was 25,000 units at 310,000. Determine the cost of goods sold for 210,000 units, assuming a FIFO cost flow.
The following information is available for Cooke Company for the current year: The gross margin is 40% of net sales. What is the cost of goods available for sale? a. 5840,000 b. 960,000 c. 1,200,000 d. 1,220,000
Langstons purchased $3,100 of merchandise during the month, and its monthly income statement shows a cost of goods sold of $3,000. What was the beginning inventory if the ending inventory was $1,250?
Reid Company uses the periodic inventory system. On January 1, it had an inventory balance of 250,000. During the year, it made 613,000 of net purchases. At the end of the year, a physical inventory showed it had ending inventory of 140,000. Calculate Reid Companys cost of goods sold for the year.
Logo Gear purchased $2,250 worth of merchandise during the month, and its monthly income statement shows cost of goods sold of $2,000. What was the beginning inventory if the ending inventory was $1,000?