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question lifo and fifo inventory costing methods review problem listed below is info 4293993

Question

LIFO and FIFO Inventory Costing Methods Review Problem

Listed below is information from Rajan Company regarding the beginning inventory, purchases and sales of one item of inventory for the month of January.

1. Fill in the chart below by computing cost of goods sold for January and the value of inventory reported on the Jan 31 balance sheet. Show the correct amounts for the FIFO and LIFO inventory methods. Be sure to show your calculations and final answer

Cost of Goods Sold

reported on the January Income Statement

2. Which inventory method would the business owner choose if his primarily objective was to minimize income taxes? State your choice and why?

*Please explain your answers

Jan. 1 Beginning Inventory

6 units at $10 each

Jan 8

Sold 2 units for $30 each

Jan. 13

Purchased 10 units at $12 each

Jan 20

Sold 5 units at $30 each

 

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