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Word Problem 18-21 (Algo) [LU 18-1 (2)] LIFO was designed to protect cash flow in industries where prices increase rapidly. It has been used for both tax and financial statement reporting since the 1930s. The higher cost of goods sold under LIFO in these circumstances results in lower reported profit than under FIFO. In the 2012 budget, President Obama has threatened to repeal LIFO. If Exxon uses FIFO for its inventory valuation, calculate the cost of ending inventory and cost of goods sold if ending inventory is 110 barrels of crude oil: Beginning inventory and purchases Barrels Barrel cost Total cost January 1 132 $ 96 $ 12,672 March 1 57 102 5,814 June 1 72 99 7,128 September 1 82 91 7,462 December 1 57 104 5,928 400 I $ 39,004 Cost of ending inventory Cost of goods sold

Word Problem 18-21 (Algo) [LU 18-1 (2)] LIFO was designed to protect cash flow in industries where prices increase rapidly. It has been used for both tax and financial statement reporting since the 1930s. The higher cost of goods sold under LIFO in these circumstances results in lower reported profit than under FIFO. In the 2012 budget, President Obama has threatened to repeal LIFO. If Exxon uses FIFO for its inventory valuation, calculate the cost of ending inventory and cost of goods sold if ending inventory is 110 barrels of crude oil: Beginning inventory and purchases Barrels Barrel cost Total cost January 1 132 $ 96 $ 12,672 March 1 57 102 5,814 June 1 72 99 7,128 September 1 82 91 7,462 December 1 57 104 5,928 400 I $ 39,004 Cost of ending inventory Cost of goods sold

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Word Problem 18-21 (Algo) [LU 18-1 (2)] LIFO was designed to protect cash flow in industries where prices increase rapidly. It has been used for both tax and financial statement reporting since the 1930s. The higher cost of goods sold under LIFO in these circumstances results in lower reported profit than under FIFO. In the 2012 budget, President Obama has threatened to repeal LIFO. If Exxon uses FIFO for its inventory valuation, calculate the cost of ending inventory and cost of goods sold if ending inventory is 110 barrels of crude oil: Beginning inventory and purchases Barrels Barrel cost Total cost January 1 132 $ 96 $ 12,672 March 1 57 102 5,814 June 1 72 99 7,128 September 1 82 91 7,462 December 1 57 104 5,928 400 I $ 39,004 Cost of ending inventory Cost of goods sold
Transcribed Image Text:Word Problem 18-21 (Algo) [LU 18-1 (2)] LIFO was designed to protect cash flow in industries where prices increase rapidly. It has been used for both tax and financial statement reporting since the 1930s. The higher cost of goods sold under LIFO in these circumstances results in lower reported profit than under FIFO. In the 2012 budget, President Obama has threatened to repeal LIFO. If Exxon uses FIFO for its inventory valuation, calculate the cost of ending inventory and cost of goods sold if ending inventory is 110 barrels of crude oil: Beginning inventory and purchases Barrels Barrel cost Total cost January 1 132 $ 96 $ 12,672 March 1 57 102 5,814 June 1 72 99 7,128 September 1 82 91 7,462 December 1 57 104 5,928 400 I $ 39,004 Cost of ending inventory Cost of goods sold
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