Preview Work Yale Department Store maintains separate inventory records for each type of merchandise it sells. The inventory records for product type X show the following for the month of September: |Beginning inventory |9/1 |200 |$3.00 |Purchase |9/8 |150 |3.20 |Sale |9/13 |130 |5.00 |Purchase |9/19 |50 |3.50 |Sale |9/22 |80 |5.25 |Purchase |9/26 |100 |3.55 |Purchase |9/29 |50 |3.60 |Sale |9/30 |80 |5.50 Required: 1. Assume that Yale uses a perpetual inventory system. Calculate the cost of ending inventory and the cost of goods sold for September under the following inventory valuation methods: a) FIFO b) LIFO c) Average (moving) Cost 2. September was a month of increasing inventory acquisition cost for Yale. Will FIFO or LIFO yield the lower net income under these circumstances? Explain why. 3. Given that Yale uses the LIFO method for external reporting, what amount is considered LIFO Reserve if the FIFO method was used for internal purposes for the month of September? 4. Assume that Yale has a 40% tax rate. How much tax savings will be generated if Yale uses the LIFO method for inventory valuation?

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FIFO Receipts Issue Balance Quantity Rate Value Quantity Rate Value Quantity Rate Value Beginning In... View the full answer