Question - ABC company has the following record for inventory: On June 1, beginning inventory was 14 units @ $42, a purchase was made June 2 for 4 units @ $69, a sale was made on June 7 for 7 units @ $111, and a final sale was made on June 13 for 5 units at $111.
What amounts should the company report for ending inventory and cost of goods sold under the FIFO method and the LIFO method?
Which method would result in the lowest net income and tax if everything else is equal?
How did you determine the method that would result in the lowest net income and tax?