10-24 - impact on the gross margin that we use to calculate...

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Fifo Balance Sheet income statement Statement of cash flows Cash + Inventory = C. Stock + Ret Earn rev - exp = net inc 225000 225000 225000 225000 oa -38000 38000 -38000 oa -31500 31500 -31500 oa -59000 -59000 59000 -66400 -66400 66400 -66400 oa total 89100 10500 99600 99600 Lifo Balance Sheet income statement Statement of cash flows Cash + Inventory = C. Stock = Ret Earn rev - exp = net inc 225000 225000 225000 225000 oa -38000 38000 -38000 oa -31500 31500 -31500 oa -60000 -60000 60000 -66000 -66000 66000 -66000 oa total 89500 9500 99000 99000 b 99600 c 99000 d e by using the different methods, fifo and lifo, causes the account of expenses to be different. This has an 
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Unformatted text preview: impact on the gross margin that we use to calculate income tax. This then explains the difference between the two income taxes it causes the statement of cash flows to change when one has to account for income tax, everything else stays the same because cash is being exchanged for goods which isn't effect by lifo or fifo....
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This homework help was uploaded on 04/16/2008 for the course ACCT 221 taught by Professor Catherinewest during the Fall '06 term at UMass (Amherst).

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