Interim accounting under LIFO
Tap Manufacturing Company records sales of $1,000,000 and cost of sales of $550,000 during the first quarter of 2011. Tap uses the LIFO inventory method, and its inventories are computed as follows:
|
Beginning LIFO inventory at January 1 |
10,000 units at $5 |
$50,000 |
|
Ending LIFO inventory at March 31 |
6,000 units at $5 |
$30,000 |
Before year end, Tap expects to replace the 4,000 units liquidated in the first quarter. The current cost of the inventory units is $7each.
REQUIRED: At what amount will Tap report cost of sales in its first quarter interim report?