Question

Please do the required 1 and required 2 .

32 The Reuschel Company began 2018 with inventory of 27,000 units at a cost of $6 per unit. During 2018, 67,000 units were purchased for $7.60 each. Sales for the year totaled 79,500 units leaving 14,500 units on hand at the end of 2018. Reuschel uses a periodic inventory system and the LIFO inventory cost method. Required: 1. Calculate cost of goods sold for 2018. 2. Calculate the effect of the LIFO on the income. 15 points (8 02:27:48 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate cost of goods sold for 2018. Cost of goods sold Required 1 Required 2 >

Answer 1

solution D Calculation of cost of goods asold for 2018. As por LIFO Method. The units forming part of Inventory at last will be ones to be - Sold first Accordingly out of yearly sales of 79500 units 67000 units will be out of units purchased during 2018. renaling unitée le ( 79500 - 67000 = 12500 units) will be out of opening Inventory.

Therefore the following table shows 8 509200 67000 units @ 7.60 each 12500 units @ 6 each Total cost of goods sold 75000 584200

2 LIFO Layer per unit = Current year cost per unit - cost of Inventory per unit of prios period. = 7.60 - 6. = 1.60 for 12500 units of prior period of Layer Inventory sold, the effect Liquidation = 1.60 X 12500 = 20000 The Income of the Year effect of LIFO Layer The Increases by the 20000. requedation is to Increase the Income by 20000.