P6-7B The management of Clare Co.

P6-7B The management of Clare Co. asks your help in determining the comparative effects ofthe FIFO and LIFO inventory cost flow methods. For 2011, the accounting records show the followingdata.Inventory, January 1 (10,000 units) $ 45,000Cost of 100,000 units purchased 532,000Selling price of 80,000 units sold 700,000Operating expenses 140,000Units purchased consisted of 35,000 units at $5.10 on May 10; 35,000 units at $5.30 on August 15;and 30,000 units at $5.60 on November 20. Income taxes are 30%.Instructions(a) Prepare comparative condensed income statements for 2011 under FIFO and LIFO. (Showcomputations of ending inventory.)(b) Answer the following questions for management.(1) Which inventory cost flow method produces the most meaningful inventory amount forthe balance sheet? Why?(2) Which inventory cost flow method produces the most meaningful net income? Why?(3) Which inventory cost flow method is most likely to approximate actual physical flow ofthe goods? Why?(4) How much additional cash will be available for management under LIFO than underFIFO? Why?(5) How much of the gross profit under FIFO is illusory in comparison with the gross profitunder LIFO?

Show more

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