Mills, Inc., sold 120,000 cases of glue at $20 per case during 2014. Its beginning inventory consisted
Question:
Mills, Inc., sold 120,000 cases of glue at $20 per case during 2014. Its beginning inventory consisted of 20,000 cases at a cost of $12 per case. During 2014, it purchased 60,000 cases at $14 per case and, later, 50,000 cases at $15 per case. Operating expenses were $550,000, and the applicable income tax rate was 30 percent. 1. Using the periodic inventory system, compute net income using the FIFO method and the LIFO method for costing inventory. Which alternative produces the larger cash flow? 2. The company is considering a purchase of 10,000 cases at $15 per case just before the year end. What effect on net income and on cash flow will this proposed purchase have under each method?
Fantastic news! We've located the answer you've been seeking!
Step by Step Answer:
Answer rating: 66% (9 reviews)
1 FIFO LIFO Method Method Sales 120 000 20 2 400 000 2 400 000 Cost of goods sold Beginning inventory 20 000 12 240 000 240 000 Purchases 60 000 14 84…View the full answer
Answered By
Mwangi Clement
I am a tried and tested custom essay writer with over five years of excellent essay writing. In my years as a custom essay writer, I have completed more than 2,000 custom essays in a diverse set of subjects. When you order essays from me, you are working with one of the best paper writers on the web. One of the most common questions I get from customers is: “can you write my essay?” Upon hearing that request, my goal is to provide the best essays and overall essay help available on the web. I have worked on papers in subjects such as Nursing and Healthcare, English Literature, Sociology, Philosophy, Psychology, Education, Religious Studies, Business, Biological Sciences, Communications and Media, Physical Sciences, Marketing and many others. In these fields, my specialties lie in crafting professional standard custom writings. These include, but are not limited to: research papers, coursework, assignments, term papers, capstone papers, reviews, summaries, critiques, proofreading and editing, and any other college essays.
My extensive custom writings experience has equipped me with a set of skills, research abilities and a broad knowledge base that allows me to navigate diverse paper requirements while keeping my promise of quality. Furthermore, I have also garnered excellent mastery of paper formatting, grammar, and other relevant elements. When a customer asks me to write their essay, I will do my best to provide the best essay writing service possible. I have satisfactorily offered my essay writing services for High School, Diploma, Bachelors, Masters and Ph.D. clients.
I believe quality, affordability, flexibility, and punctuality are the principal reasons as to why I have risen among the best writers on this platform. I deliver 100% original papers that pass all plagiarism check tests (Turnitin, Copyscape, etc.). My rates for all papers are relatively affordable to ensure my clients get quality essay writing services at reasonable prices.