Problem
The management of Windsor, Inc. asks your help in determining the comparative effects of the FIFO and LIFO inventory cost flow methods. For 2017, the accounting records show these data.
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Inventory, January 1 (10,970 units)
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$ 35,104
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Cost of 111,970 units purchased
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401,230
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Selling price of 100,530 units sold
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780,800
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Operating expenses
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116,630
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Units purchased consisted of 34,600 units at $3.40 on May 10; 60,510 units at $3.60 on August 15; and 16,860 units at $3.90 on November 20. Income taxes are 29%.
(a) Prepare comparative condensed income statements for 2017 under FIFO and LIFO. How do I find the Cost of Goods sold as well the Income tax price?