Answered

Dole Industries had the following inventory transactions occur during 2022: Units Cost/unit Feb. 1, 2022 Purchase 90 $90 Mar. 14, 2022 Purchase 155 $94 May 1, 2022 Purchase 110 $98 The company sold 255 units at $126 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, and operating expenses of $2,500, what is the company’s after-tax income using LIFO? (rounded to whole dollars)

Answer :

abiolataiwo2015

Answer:

$4,186

Explanation:

(90 ×$90) + (155 ×$94) + [(255 -245) ×$98]

=$8,100+$14,570+$10×$98

=$22,670+$980

=$23,650

[(255 ×$126) - $23,650]

=$32,130-$23,650 =$8,480

Assuming that a periodic inventory system is used, and operating expenses of $2,500

($8,480-$2,500)×0.70

=$5,980×0.70= $4,186

Therefore the company’s after-tax income is $4,186

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