AAA Hardware uses the LIFO method to report its inventory. Inventory at the beginning of...
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AAA Hardware uses the LIFO method to report its inventory. Inventory at the beginning of the year consisted of 23,000 units of the companys one product. These units cost $14 each. During the year, 73,000 units were purchased at a cost of $17 each and 80,500 units were sold. Near the end of the fiscal year, management is considering the purchase of an additional 9,000 units at $17. Required: 1. What would be the effect of this purchase on income before income taxes? 2. What would be the effect of this purchase on income before income taxes using FIFO?
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