The Units of Product YY2 Available for Sale During the Year

question 62

Essay

The units of Product YY2 available for sale during the year were as follows:
$\begin{array}{lllll}\$ 30 \text { each } & \text { at } & 16 \text { units } & \text { Inventory } & \text { Apr 1 } \\\$ 33 \text { each } & \text { at } & 30 \text { units } & \text { Purchase } & \text { Jun 16 } \\\$ 37 \text { each } & \text { at } & 45 \text { units } & \text { Purchase } & \text { Sep 28 }\end{array}$ There are 15 units of the product in the physical inventory at March 31. The periodic inventory system is used. Determine the difference in gross profit between the LIFO and FIFO inventory cost systems.

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Definitions:

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects revenue from its customers by dividing total net credit sales by the average accounts receivable.

Net Working Capital

This is a measure of a company's liquidity, calculated as the difference between its current assets and current liabilities.

Current Assets

Assets that are expected to be converted into cash, sold, or used up within one year or within the normal operating cycle of the business, whichever is longer.

Current Liabilities

A company's debts or obligations that are due within one year.