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GuDViN [60]
3 years ago
12

The Churchill Corporation uses a periodic inventory system and the LIFO inventory cost method for its one product. Beginning inv

entory of 22,000 units consisted of the following, listed in chronological order of acquisition: 13,000 units at a cost of $8.00 per unit = $104,000 9,000 units at a cost of $9.00 per unit = 81,000 During 2021, inventory quantity declined by 12,000 units. All units purchased during 2021 cost $12.00 per unit. Required: Calculate the before-tax LIFO liquidation profit or loss that the company would report in a disclosure note, assuming the amount determined is material.
Business
1 answer:
ddd [48]3 years ago
4 0

Answer:

$61,000

Explanation:

Given:

Beginning inventory = 22,000

13,000 units at a cost of $8.00 per unit = $104,000

9,000 units at a cost of $9.00 per unit = 81,000

inventory quantity declined by 12,000 units

All units purchased during 2021 cost = $12.00 per unit

Now,

Liquidation quantity = Beginning inventory - acquisition

thus,

20000 - 13000 = 7000  units at a cost of $8.00 per unit

20000 - 9000 = 11,000 units at a cost of $9.00 per unit

Total liquidation quantity = 7,000 + 11,000 = 18,000 units

LIFO profit for units at a cost  $8.00 per unit = Purchasing cost - unit cost

= $12 - $8 = $4

LIFO profit for units at a cost  $9.00 per unit = Purchasing cost - unit cost

= $12 - $9 = $3

Now,

The LIFO profit = 7,000 × $4 + 11,000 × $3

or

The LIFO profit = 28,000 + 33,000 = $61,000

Hence,

The before tax LIFO profit is $61,000

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OLEGan [10]

Answer:

Depreciation for year 3 = $115518

BV = $57798

Explanation:

The modified accelerated cost recovery method employees a classification-based approach to depreciating certain assets, once classified are assigned respective rates of depreciation. for example, assets classified under automobiles, trucks and machinery are treated under 5-year MACRS and will be depreciated at 20%, 32%, 19.2% and so on.

In this question the bridge across Rio Grande being built by Del Norte Brick co is treated under 3-year MACRS, for which the rates are as follows:

33.33% for the first year

44.45% 2nd year

14.81% 3rd year

7.41% 4th year

We have been asked to determine 3rd years' depreciation and book value, determined as follows:

Depreciation year 1: $780000 33.33% = $259974

Depreciation year 2: $780000 44.45% = $346710

Depreciation year 3: $780000 14.81% = $115518

So the depreciation for year 3 = $115518

The book value is calculated as follows:

<em>Book value = cost - accumulated depreciation</em>

BV = $780000 - $722202

BV = $57798

6 0
3 years ago
When Corey runs out of shampoo he buys whatever brand is on sale at his local CVS drugstore. What is his level of involvement in
hodyreva [135]

Answer: A. Extensive

Explanation: When Corey runs out of shampoo he buys whatever brand is on sale at his local CVS drugstore.

From the above question, Corey has an extensive decision making on toothpaste purchase as he does not have any brand loyalty. He buys whatever brand is available for him to buy and he is not particular about the name, the size or content of the product he is buying.

6 0
2 years ago
Economics can be described as the study of how people use ________ resources to satisfy ________ wants.A) unlimited; unlimitedB)
Masteriza [31]

Answer:

C) limited; unlimited

Explanation:

Economics can be described as the study of how people use limited resources to satisfy unlimited wants.

5 0
3 years ago
How does buying a plant asset affect general ledger accounts
Tanzania [10]

Answer:

A plant asset will add to assets and subtract from liabilities.

Explanation:

The general ledger holds all of the information needed to prepare financial statements and includes assets, liabilities, equity, revenue and expenses.

I hope I understood the question and that this helps.

7 0
3 years ago
A company has inventory that cost $50,000. Its scrap value is $65,000. The inventory could be sold for $150,000 if manufactured
Lemur [1.5K]

Answer:

It is more profitable to continue processing.

Explanation:

Giving the following information:

A company has inventory that cost $50,000. Its scrap value is $65,000. The inventory could be sold for $150,000 if manufactured further at an additional cost of $80,000.

Sell for scrap= 65,000 - 50,000= 15,000

Continue processing= 150,000 - 80,000 - 50,000= 20,000

7 0
3 years ago
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