Information in 2020 About inventory FIFO method

Date Description Quantity Unit Selling Price or Unit Cost

1-Jan Inventory 40 EUR 400

1-May Credit Purchase 100 EUR 450

1-Jul Credit Sales 70 EUR 800

About plant assets

Equipment EUR 4,800,000

Less: Accumulated Depreciation- Equipment EUR 500,000

The company uses straight-line depreciation for equipment. The equipment is estimated to have a 10-year useful life and no salvage value.

Oct 1 Sold equipment that cost EUR 75,000 when purchased on January 1, 2016.

The equipment was sold for EUR 45,000.

a) Journalize those transactions!

b) Explain the possible impacts on the firm's Statement of Cash Flows!

c) Explain the possible impacts on the firm's Financial Statement Ratio Analysis!