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FIFO
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The FIFO Method: First In, First Out
Jan 1, 2009
investopedia.com
The Canton Corporation shows the following income statement. The firm uses FIFO inventory accounting.CANTON CORPORATIONIncome Statement for 20X1Sales236,800(14,800 units at16.00)Cost of goods sold148,000(14,800 units at10.00)Gross profit88,800Selling and administrative expense11,840Depreciation11,600Operating profit65,360Taxes (30%)19,608Aftertax income45,752a. Assume in 20X2 the same 14,800-unit volume is maintained but that the sales price increases by 10 percent. Because of FIFO inventory pol
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