Cyclone Co. uses the periodic inventory system. The following information about

Question

Cyclone Co. uses the periodic inventory system. The following information about their inventory of Model XX Mountain Bicycles is available:

1/1 Beg Inventory 50 $800
4/12 Purchase 80 $820
7/8 Purchase 75 $840
9/22 Purchase 90 $850

During the year, 235 bicycles were sold at a price of $1500 each. Other operating costs equaled $80,000 and their tax rate is 30%. round the final answer to the nearest dollar

What was ending inventory and cost of goods sold on 12/31 under the LIFO cost flow assumption.

Explanation / Answer

Under LIFO, Last purchased Bicyle will be sold first.
SO COGS : 90*$850 + 75*$840 + 70*$820 = $196,900

And Ending Inv = 10*$820+50*$800 = $48,200

Sales 235*$1500 = 352500
Less COGS $196,900
Less Othe Op cost 80,000
-------------------------
EBT $75,600
Less Tax 30% $22,680
--------------------
Net Income $52,920

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