During 2005, Baker Company and Baumer Company made the following identical purchases:

September 1^st 100 units @ $12.00
October 1^st 200 units @ $11.50
November 1^st 200 units @ $10.50
December 1^st 100 units @ $10.00

On December 31^st each company sold 450 units, but Baker uses LIFO inventory valuation and Baumer uses FIFO inventory valuation. Assume there was no beginning inventory.

Requirements

A. Calculate cost of goods sold and ending inventory for each company.

B. How will the difference in cost of goods sold affect net income?

Answer rating: 100% (QA)

Baker inventory Date Event Quantity Cost per unit Units sold Cost of goods sold Uni... View the full answer