Check my work 6 The Churchill Corporation uses a periodic inventory system and t
ID: 2558045 • Letter: C
Question
Check my work 6 The Churchill Corporation uses a periodic inventory system and the LIFO inventory cost method for its one product. Beginning inventory of 22,000 units consisted of the following, listed in chronological order of acquisition 0 olnts 13,000 units at a cost of $8.00 per unit-$104,000 9,000 units at a cost of $9.00 per unit 81,000 Skipped During 2018, inventory quantity declined by 12,000 units. All units purchased during 2018 cost $12.00 per unit. e k Required: Calculate the before-tax LIFO liquidation profit or loss that the company would report in a disclosure note assuming the amount determined is material. Print ReferencesExplanation / Answer
Before-tax LIFO liquidation profit = $ 39,000
Total Units liquidated = 12,000 Units
Units liquidated multiplied by the difference between their current cost and acquisition cost
9,000 x ($12-9) = $ 27,000
3,000 x ($12-8) = $ 12,000
Before-tax LIFO liquidation profit = $ 39,000