QP Corp. sold 5,450 units of its product at $45.50 per unit in year 2015 and inc

Question

QP Corp. sold 5,450 units of its product at $45.50 per unit in year 2015 and incurred operating expenses of $6.50 per unit in selling the units. It began the year with 650 units in inventory and made successive purchases of its product as follows.

6,750 units

Whats the inventory, Dec 31, 2015 (ending inventory) for FIFO, LIFO and Weighted Average?

Whats the income taxes expense for FIFO LIFO and weighted average?

QP Corp. sold 5,450 units of its product at $45.50 per unit in year 2015 and incurred operating expenses of $6.50 per unit in selling the units. It began the year with 650 units in inventory and made successive purchases of its product as follows.

Explanation / Answer

Units Rate/Unit Value Nos $ $ Jan 1 Opening Inventory                  650           18.50            12,025 Feb 20 Purchases              1,550           19.50            30,225 May 16 Purchases                  750           20.50            15,375 Oct 3 Purchases                  450           21.50               9,675 Dec 11 Purchases              3,350           22.50            75,375              6,750           21.14          142,675 Sales              5,450 Closing Inventory              1,300 Value of Total Purchases              6,100          130,650 1. Valuation of Inventory Under FIFO Method Valued at last purchase price on December 11. Inventory = 1300 X 22.50 = $ 29250 Under LIFO Method Nos $/pc Value Opening Inventory                  650           18.50            12,025 Purchases on Feb 20                  650           19.50            12,675 Closing Inventory              1,300            24,700 Under Weighted Average Method Valued at Average Rate of $ 21.14/pc Inventory = 1300 X 21.14 = $ 27482 2. Income Statement FIFO LIFO Weighted Average Sales          247,975       247,975          247,975 (5450 X $ 45.50) Less:- Cost of Goods Sold Openings stock + Purchases          142,675       142,675          142,675 Less:- Closing Stock            29,250         24,700            27,482 Cost of Goods Sold          113,425       117,975          115,193 Selling Expenses            35,425         35,425            35,425 (5450X 6.50) Total Exp          148,850       153,400          150,618 Net Income before tax            99,125         94,575            97,357 Tax Expenses @ 40% (assume)            39,650         37,830            38,943 Net Income after tax            59,475         56,745            58,414

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