The following information pertains to Baxter Company for 2014 Beginning inventory 90 units $15 Units purchased 320 units $19 Ending inventory consisted of 40 units Baxter sold 310 units at $30 each All purchases and sales were made with cash Required a Compute the gross margin for Baxter Company us...

a 1 Baxter Company FIFO Sales 370 30 11100 Cost of Goods Sold From Beginning Inv 90 units 15 1350 Fr ...

The following information pertains to Baxter Company for 2014. Beginning inventory ...... 90 units @ $15 Units

Question:

The following information pertains to Baxter Company for 2014.
Beginning inventory ...... 90 units @ $15
Units purchased ....... 320 units @ $19
consisted of 40 units. Baxter sold 310 units at $30 each. All purchases and sales were made with cash.

Required
a. Compute the gross margin for Baxter Company using the following cost flow assumptions:
(1) FIFO,
(2) LIFO,
(3) Weighted average.
b. What is the dollar amount of difference in net income between using FIFO versus LIFO? (Ignore income tax considerations.)
c. Determine the cash flow from operating activities, using each of the three cost flow assumptions listed in Requirement a. Ignore the effect of income taxes. Explain why these cash flows have no differences.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...