Refer to the Data Below

question 145

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Refer to the data below. Credit Company had the following inventory data for the current month:
Assume sales revenue is $7,500, operating expenses are $1,500, and the income tax rate is 40%. How much would the company save in taxes by using LIFO versus FIFO?

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Definitions:

Promised Goods

Goods that a seller has agreed to deliver to a buyer under a contract or sales agreement.

Consignment

A business arrangement in which goods are entrusted to a third party to sell, with payment occurring only after the sale.

Economic Benefits

The potential profitable returns or advantages that can be obtained from an economic activity or resource.

Revenue

The total amount of money received by a company for goods sold or services provided during a specific period.