question archive The ABC Company, expecting that decreases in oil prices are only temporary, increases its quarterly purchases as the prices of oil decreases
The ABC Company, expecting that decreases in oil prices are only temporary, increases its quarterly purchases as the prices of oil decreases
Subject:AccountingPrice: Bought3
The ABC Company, expecting that decreases in oil prices are only temporary, increases its quarterly purchases as the prices of oil decreases. ABC's quarterly oil purchases follow (S) Price/Barrel (Quantity (Barrel Period 25 30,000 First-quarter 20 37,500 Second-quarter 45,000 Third-quarter 15 60,000 Fourth-quarter Assumptions The company has no beginning inventory 1 Sales ace 150,000 barrels for the year 2 ABC uses the LIFO inventory method 3 The company's tax rate is 40% 4 Required Compute the difference in net income in dollar amounts that ABC would report under its present accounting (method (LIFO), as compared with the use of the FIFO method (Lifo - Filo A lil
