Carbondale Company Had the Following Data Available for the LastOperating Expenses Are $2,000 Per Month

The Answer is 1. a. FIFO Cost of Goods Sold: 10 × $55 $550 30 × $60 1,800 5 × $65 325 Total Cost of Goods Sold $2,675 b. LIFO Cost of Goods Sold: 25 × $60 $1,500 20 × $65 $1,300 Total Cost of Goods Sold $2,800 2. Difference in Cost of Goods Sold × 30% = Tax Savings ($2,800 - $2,675) × 30% = $37.50

Carbondale Company Had the Following Data Available for the LastOperating Expenses Are $2,000 Per Month

The Answer is 1. a. FIFO Cost of Goods Sold: 10 × $55 $550 30 × $60 1,800 5 × $65 325 Total Cost of Goods Sold $2,675 b. LIFO Cost of Goods Sold: 25 × $60 $1,500 20 × $65 $1,300 Total Cost of Goods Sold $2,800 2. Difference in Cost of Goods Sold × 30% = Tax Savings ($2,800 - $2,675) × 30% = $37.50

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Carbondale Company Had the Following Data Available for the Last

question 2

Essay

Carbondale Company had the following data available for the last six months:
$\begin{array} { | l | l | l | } \hline \text { Beg, inventory } & 10 \text { units } & \$ 55 \text { per unit } \\\hline \text { Purchase, } 3 / 1 & 30 \text { units } & \$ 60 \text { per unit } \\\hline \text { Sale, } 4 / 1 & 25 \text { units } & \$ 100 \text { per unit } \\\hline \text { Purchase, } 5 / 1 & 25 \text { units } & \$ 65 \text { per unit } \\\hline \text { Sale, } 6 / 1 & 20 \text { units } & \$ 100 \text { per unit } \\\hline\end{array}$
Operating expenses are $2,000 per month. The income tax rate is 30%.
Required:
1. Compute Cost of Goods Sold for the six months ending June 30 using:
a. FIFO perpetual
b. LIFO perpetual
2. How much will the company save in income taxes if they use LIFO instead of FIFO?

Calculate net cash provided or used by operating, investing, and financing activities.

Understand the treatment and reporting of non-cash investing and financing activities.

Demonstrate the ability to prepare a statement of cash flows from provided data.

Evaluate the effect of cash flows on a company's liquidity, financial flexibility, and operating capacity.

Definitions:

Quasi-Rents

Earnings generated from a leased asset over and above the economic cost of utilizing the asset, often temporary due to market circumstances.

Production Functions

Mathematical equations that describe the relationship between input and output quantities in the production process.

Labor

The investment of human strength and thought in the process of producing goods and services.

Output

The volume of goods or services produced by a human, mechanical, or industrial source.