Sunshine, Inc., is a seller of designer sunglasses that started its business January 1, 2018. ? Sales
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Question:
Sunshine, Inc., is a seller of designer sunglasses that started its business January 1, 2018. ? Sales and inventory information for January 2020 is as follows:
Part 2 ? Inventory Problem ? Continued
Sunshine is determining whether the company should elect FIFO or LIFO as its inventory method and needs your help with the following (show all computations):
- Compute Ending Inventory under both FIFO and LIFO inventory methods.
- Compute the amount of Gross Profit earned under the FIFO and LIFO inventory methods.
- Which inventory option do you recommend that Sunshine use if Sunshine?s goal is to maximize its profitability? Explain your answer in no more than three sentences.
- Which inventory option do you recommend that Sunshine use if Sunshine?s goal is to maximize its balance sheet? Explain your answer in no more than three sentences.
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