Word Problem 18-21 (Algo) [LU 18-1 (2)] LIFO was designed to protect cash flow in industries where prices increase rapidly. It has been used for both tax and financial statement reporting since the 1930s. The higher cost of goods sold under LIFO in these circumstances results in lower reported profit than under FIFO. In the 2012 budget, President Obama has threatened to repeal LIFO. If Exxon uses FIFO for its inventory valuation, calculate the cost of ending inventory and cost of goods sold if ending inventory is 110 barrels of crude oil: Beginning inventory and purchases Barrels Barrel cost Total cost January 1 132 $ 96 $ 12,672 March 1 57 102 5,814 June 1 72 99 7,128 September 1 82 91 7,462 December 1 57 104 5,928 400 I $ 39,004 Cost of ending inventory Cost of goods sold
Word Problem 18-21 (Algo) [LU 18-1 (2)] LIFO was designed to protect cash flow in industries where prices increase rapidly. It has been used for both tax and financial statement reporting since the 1930s. The higher cost of goods sold under LIFO in these circumstances results in lower reported profit than under FIFO. In the 2012 budget, President Obama has threatened to repeal LIFO. If Exxon uses FIFO for its inventory valuation, calculate the cost of ending inventory and cost of goods sold if ending inventory is 110 barrels of crude oil: Beginning inventory and purchases Barrels Barrel cost Total cost January 1 132 $ 96 $ 12,672 March 1 57 102 5,814 June 1 72 99 7,128 September 1 82 91 7,462 December 1 57 104 5,928 400 I $ 39,004 Cost of ending inventory Cost of goods sold
Chapter21: International Cash Management
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![Word Problem 18-21 (Algo) [LU 18-1 (2)]
LIFO was designed to protect cash flow in industries where prices increase rapidly. It has been used for both tax and financial
statement reporting since the 1930s. The higher cost of goods sold under LIFO in these circumstances results in lower reported profit
than under FIFO. In the 2012 budget, President Obama has threatened to repeal LIFO. If Exxon uses FIFO for its inventory valuation,
calculate the cost of ending inventory and cost of goods sold if ending inventory is 110 barrels of crude oil:
Beginning inventory and
purchases
Barrels
Barrel
cost
Total cost
January 1
132
$ 96
$ 12,672
March 1
57
102
5,814
June 1
72
99
7,128
September 1
82
91
7,462
December 1
57
104
5,928
400
I
$ 39,004
Cost of ending inventory
Cost of goods sold](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0c5f1fb5-031d-4259-9cb7-37519dc78495%2F859dd12f-9d07-4e76-b078-c123024c856e%2Fsxtgj6p_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Word Problem 18-21 (Algo) [LU 18-1 (2)]
LIFO was designed to protect cash flow in industries where prices increase rapidly. It has been used for both tax and financial
statement reporting since the 1930s. The higher cost of goods sold under LIFO in these circumstances results in lower reported profit
than under FIFO. In the 2012 budget, President Obama has threatened to repeal LIFO. If Exxon uses FIFO for its inventory valuation,
calculate the cost of ending inventory and cost of goods sold if ending inventory is 110 barrels of crude oil:
Beginning inventory and
purchases
Barrels
Barrel
cost
Total cost
January 1
132
$ 96
$ 12,672
March 1
57
102
5,814
June 1
72
99
7,128
September 1
82
91
7,462
December 1
57
104
5,928
400
I
$ 39,004
Cost of ending inventory
Cost of goods sold
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