Denise’s Boutique uses the perpetual inventory method for its wristlet purses. It has provided the following inventory information for October: Oct. 1 On hand, 40 units @ $20 each $ 800 Oct. 8 Purchased 200 units @ $21 each 4,200 Oct. 14 Sold 190 units @ $50 each 9,500 Oct. 19 Purchased 100 units @ $27 each 2,700 Oct. 28 Sold 120 units @ $50 each 6,000 Denise’s Boutique has a 30% effective income tax rate. A. How much is the cost of ending inventory at October 31 and the cost of goods sold for October using FIFO? B. How much is the cost of ending inventory at October 31 and the cost of goods sold for October using LIFO? C. How much will Denise’s Boutique save in income taxes if it uses LIFO? D. Calculate Denise’s Boutique’s inventory-on-hand period under both LIFO and FIFO.
Denise’s Boutique uses the perpetual inventory method for its wristlet purses. It has provided the following inventory information for October: Oct. 1 On hand, 40 units @ $20 each $ 800 Oct. 8 Purchased 200 units @ $21 each 4,200 Oct. 14 Sold 190 units @ $50 each 9,500 Oct. 19 Purchased 100 units @ $27 each 2,700 Oct. 28 Sold 120 units @ $50 each 6,000 Denise’s Boutique has a 30% effective income tax rate. A. How much is the cost of ending inventory at October 31 and the cost of goods sold for October using FIFO? B. How much is the cost of ending inventory at October 31 and the cost of goods sold for October using LIFO? C. How much will Denise’s Boutique save in income taxes if it uses LIFO? D. Calculate Denise’s Boutique’s inventory-on-hand period under both LIFO and FIFO.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter7: Inventories: Cost Measurement And Flow Assumptions
Section: Chapter Questions
Problem 11RE: Jessie Stores uses the periodic system of calculating inventory. The following information is...
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Denise’s Boutique uses the perpetual inventory method for its wristlet purses. It has provided the following inventory information for October:
Oct. 1 On hand, 40 units @ $20 each $ 800
Oct. 8 Purchased 200 units @ $21 each 4,200
Oct. 14 Sold 190 units @ $50 each 9,500
Oct. 19 Purchased 100 units @ $27 each 2,700
Oct. 28 Sold 120 units @ $50 each 6,000
Denise’s Boutique has a 30% effective income tax rate.
A. How much is the cost of ending inventory at October 31 and the cost of goods sold for October
using FIFO?
B. How much is the cost of ending inventory at October 31 and the cost of goods sold for October
using LIFO?
C. How much will Denise’s Boutique save in income taxes if it uses LIFO?
D. Calculate Denise’s Boutique’s inventory-on-hand period under both LIFO and FIFO.
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