Cansela corporation uses a periodic inventory system and the lifo

LIFO liquidation

Cansela Corporation uses a periodic inventory system and the LIFO method to value its inventory. The company began 2011 with inventory of 4,500 units of its only product. The beginning inventory balance of $64,000 consisted of the following layers:

2,000 units at $12 per unit

. $24,000

2,500 units at $16 per unit

40,000

$64,000

During the three years 2011’2013 the cost of inventory remained constant at $18 per unit. Unit purchases and sales during these years were as follows:

Purchases

Sales

2011

10,000

11,000

2012

13,000

14,500

2013

12,000

13,000

Required:

1. Calculate cost of goods sold for 2011, 2012, and 2013.

2. Disregarding income tax, determine the LIFO liquidation profit or loss, if any, for each of the three years.

3. Prepare the company’s LIFO liquidation disclosure note that would be included in the 2013 financial statements to report the effects of any liquidation on cost of goods sold and net income. Assume any liquidation effects are material and that Cansela’s effective income tax rate is 40%. Cansela’s 2013 financial statements include income statements for two prior years for comparative purposes.

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more