The Following Information Is for Carmen Company for 2014

Essay

The following information is for Carmen Company for 2014:
Beginning inventory, 100 units @ $25
Units purchased, 200 units @ $28
During the year, Carmen sold 250 units for $45 each.
Required:
a) Calculate gross margin assuming Carmen uses: 1) FIFO; 2) LIFO
b) Disregarding the effect of income taxes, what would be the dollar amount of difference in net income between FIFO and LIFO?
c) Calculate the cash flow from operating activities assuming that Carmen uses 1) LIFO; 2) FIFO. Assume that all transactions during the year were for cash.