Problemabc company employs a periodic inventory system and, Ask an Expert

Accounting

Problem:

ABC Company employs a periodic inventory system and sells its inventory to customers for $25 per unit. ABC Company had the following inventory information available for the month of May:

May 1 Beginning inventory 5,000 units @ $9 cost per unit
May 6 Purchased 4,000 units @ $11 cost per unit May 8 Sold 3,000 units
May 13 Purchased 2,000 units @ $5 cost per unit May 18 Sold 2,500 units
May 21 Purchased 2,500 units @ $8 cost per unit May 28 Sold 1,800 units
May 30 Purchased 2,000 units @ $18 cost per unit
Assume ABC Company uses the LIFO inventory costing method and that ABC Company's income statement for May showed operating expenses of $21,200 and an income tax rate of 35%.

Required:

Calculate the amount of net income reported on ABC Company's income statement for May. Do not use decimals in your answer.

Note: Please show how to work it out.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91165819

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