The Following Information Is for Choi Company for Year 2

question 7

Essay

The following information is for Choi Company for Year 2:
Beginning inventory 120 units @ $100Units purchased 180 units @ $112Choi sold 250 units for $190 each
Required:a)Calculate gross margin assuming Choi uses:1)FIFO.2)LIFO.3)Weighted average.b)Disregarding the effect of income taxes, what would be the dollar amount of difference in net income between FIFO and LIFO?c)Again, disregard the effect of income taxes. Calculate the Year 2 cash flow from operating activities assuming that Choi uses:1)FIFO.2)LIFO.

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Definitions:

Revamped Products

Products that have been significantly redesigned or updated with new features or improvements to meet current market demands.

Manufacturer

A company or person that produces finished goods from raw materials in large quantities for sale.

Risk

The potential for losing something of value or the exposure to danger, harm, or loss, often evaluated in decision-making processes.

New And Improved

Phrasing often used in marketing to indicate that a product has been updated or enhanced.