A physical inventory on december 31 shows 2000 units on, Ask an Expert

Accounting

Holliday Company's inventory records show the following data:

                                    Units         Unit Cost
Inventory, January     1 5,000    $9.00
Purchases: June 18     4,500           8.00
November 8                 3,000           7.00

A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for $12 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method.

If the company uses FIFO, what is the gross profit for the period?

What is the difference in taxes if LIFO rather than FIFO is used?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9410638

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