Question

Sheffield Corp. had the following inventory transactions occur during 2022: Units Cost/unit Feb. 1, 2022 Purchase 114 $48 Mar. 14, 2022 Purchase 197 $50 May 1, 2022 Purchase 140 $52 The company sold 324 units at $67 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company’s gross profit using LIFO?

Answer 1

Gross profit= 5,228

Step-by-step explanation:

Giving the following information:

Feb. 1, 2022: Purchase 114 units at $48

Mar. 14, 2022: Purchase 197 units at $50

May 1, 2022: Purchase 140 units at $52

The company sold 324 units at $67 each and has a tax rate of 30%.

LIFO (last-in, first-out)

First, we need to calculate the cost of goods sold.

COGS= 140*52 + 184*50= $16,480

Sales= 324*67= 21,708

COGS= 16,480 (-)

Gross profit= 5,228

Tax= 0.30*5228= 1,568.4 (-)

Net profit= $3,659.6