Butterfly Corporation, a calendar year taxpayer, has ending inventory of $150,000 on December 31, 20X2. During the year 20X2, the corporation purchased additional inventory of $375,000. If cost of goods sold for 20X2 is $470,000, what was the beginning inventory at January 1, 20X2?
Butterfly Corporation, a calendar year taxpayer, has ending inventory of $150,000 on December 31, 20X2. During the year 20X2, the corporation purchased additional inventory of $375,000. If cost of goods sold for 20X2 is $470,000, what was the beginning inventory at January 1, 20X2?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter13: Corporations: Earning & Profits And Distributions
Section: Chapter Questions
Problem 20P
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1. Butterfly Corporation, a calendar year taxpayer, has ending inventory of $150,000 on December 31, 20X2. During the year 20X2, the corporation purchased additional inventory of $375,000. If cost of goods sold for 20X2 is $470,000, what was the beginning inventory at January 1, 20X2?
2. This next question will be more opinion-based. What is an Enrolled Agent (EA) and what is a CPA? What requirements must be met in order to obtain either of these titles? Would you be interested in pursuing either and why?
Expert Solution
Step 1
Inventory
- Inventory is an Asset that is presented in the statement of financial position under the current asset class,
- inventory can be in form of or included Raw material, Work in progress goods, Finished goods.
- Inventory is called as good available for sale.
- Inventory is valued under LIFO, FIFO, weighted average.
Cost of goods sold (COGS)
COGS refers to the cost (Direct cost) incurred to the company to produce goods, which later become available for sale, COGS excludes indirect cost.
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