MERRIMACK TRACTORS AND MOWERS, I

CALCULATION OF BALANCE ANS SALESCALCULATION

AS PER LIFO METHOD
OF INVENTORY BALANCE
PARTICULARS
AVAILABLE SALES
UNITS
RATE
AMOUNT
BEGINNING
15000
900 13500000
QUARTER 1
10000
1400 14000000
QUARTER 2
10000
1500 15000000
QUARTER 3
10000
1600 16000000
QUARTER 4
10000
1700 17000000
TOTAL
55000
75500000

CALCULATION OF INVENTORY BALANCE

PARTICULARS
AVAILABLE SALES
UNITS
RATE
AMOUNT
BEGINNING
15000
900 13500000
QUARTER 1
10000
1400 14000000
QUARTER 2
10000
1500 15000000
QUARTER 3
10000
1600 16000000
QUARTER 4
10000
1700 17000000
TOTAL
55000
75500000

INCOME STATEMENT FOR THE YEAR (2008)

ASSUMPTIONS PREPARING INCOM
PARTICULARS
LIFO
FIFO
SALES
73700000
73700000
1 THERE IS A 10% INCREASE IN THE
COGS
62000000
50500000
2 SELLING AND DISTRIBUTION EXPEN
GROSS MARGIN
11700000
23200000
S & D EXPENCES
10000000
10000000
INCOME BEFORE TAX
1700000
13200000 CONCLUSION:- THE COMPANY IS MAKING MORE PRO
LESS -TAX (35%)
595000
4620000
NET INCOME
1105000
8580000
PROFIT MARGIN(%)
1.5
11.64

S AND MOWERS, INC.: LIFO OR FIFO ?

INVENTORY BALANCE ANS SALES AS PER LIFO METHOD (2008)

ISSUE
SALES
BALANCE
UNITS
RATE
AMOUNT
UNITS
RATE
AMOUNT
10000
1700 17000000
10000
1600 16000000
10000
1500 15000000
10000
1400 14000000
15000
900 13500000
40000
62000000
15000
900 13500000

F INVENTORY BALANCE ANS SALES AS PER FIFO METHOD(2008)

SALES
BALANCE
UNITS
RATE
AMOUNT
UNITS
RATE
AMOUNT
15000
900 13500000
10000
1400 14000000
10000
1500 15000000
5000
1600 8000000
5000
1600 8000000
10000
1700 17000000
40000
50500000
15000
3300 25000000

ONS PREPARING INCOME STATEMENT

A 10% INCREASE IN THE SALES PER YEAR

ND DISTRIBUTION EXPENSES REMAINS THE SAME

Y IS MAKING MORE PROFIT USING FIFO METHOD SO IT SHOULD OPT FOR THE FIFO METHOD OF INVENTORY EVALUATION.

NTORY EVALUATION.