Flywire is a newly founded merchandising company in the U.S., starting its business in middle 2021....

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Flywire is a newly founded merchandising company in the U.S., starting its business in middle 2021. The company has the following data for its first-year business: Date Purchase of inventory Purchase of inventory Sales Jun 1, 2021 Sep 1, 2021 Unit/Amount $20* 3,000 60,000 $32*2,000-64,000 2,800 units Required: a) Determine ending inventory and cost of goods sold if Flywire adopts FIFO and LIFO respectively; b) Suppose Flywire has a loan that requires compliance with certain covenants, such as maintenance of a minimum current ratio (calculated as current assets over current liabilities), is Flywire more likely to adopt FIFO or LIFO? c) Suppose Flywire wants to minimize tax payment for the current period, is Flywire more likely to adopt FIFO or LIFO? Flywire is a newly founded merchandising company in the U.S., starting its business in middle 2021. The company has the following data for its first-year business: Date Purchase of inventory Purchase of inventory Sales Jun 1, 2021 Sep 1, 2021 Unit/Amount $20* 3,000 60,000 $32*2,000-64,000 2,800 units Required: a) Determine ending inventory and cost of goods sold if Flywire adopts FIFO and LIFO respectively; b) Suppose Flywire has a loan that requires compliance with certain covenants, such as maintenance of a minimum current ratio (calculated as current assets over current liabilities), is Flywire more likely to adopt FIFO or LIFO? c) Suppose Flywire wants to minimize tax payment for the current period, is Flywire more likely to adopt FIFO or LIFO?

Answer rating: 100% (QA)

Based on the information given in the image lets solve the problem stepbystep a To determine the ending inventory and the cost of goods sold COGS for ... View the full answer