During 2005, Baker Company and Baumer Company made the following identical purchases:
100 units @ $10.00
200 units @ $10.50
200 units @ $11.50
100 units @ $12.00
Each company sold 400 units, but Baker uses LIFO inventory valuation and Baumer uses FIFO inventory valuation. Assume there was no beginning inventory. Calculate cost of goods sold and ending inventory for each company. How will the difference in cost of goods sold affect net income?

Question

Quizplus · Accepted Answer

The Answer of During 2005, Baker Company and Baumer Company made the following identical purchases:
100 units @ $10.00
200 units @ $10.50
200 units @ $11.50
100 units @ $12.00
Each company sold 400 units, but Baker uses LIFO inventory valuation and Baumer uses FIFO inventory valuation. Assume there was no beginning inventory. Calculate cost of goods sold and ending inventory for each company. How will the difference in cost of goods sold affect net income?

During 2005, Baker Company and Baumer Company Made the Following