1. All three methods do affect the net income - Deducted Purchased Goods: operate affect the cost of the good by decreasing it, which scoop place affect the net income in the period the product is change. - early(a) Income: dismiss Income would be higher than the other methods. - Not taken snub as expense: Cost of goods sold entrust be lower as discount leave alone be counted, however it will decrease net income while instauration an expense. Overall, the cost of goods sold will be affected, because take in margin and net income will as well. 2. shrinkage should be Dr. run Expense Cr. Inventory However, there be some industries that perform a account to Cost of Goods sold even though these items were never sold. I would suggest operational Expense is a better approach. 3. An pillow slip of an intentness that uses LIFO is the mining industries. Assuming they have a pit, they argon filling it up with burn they dig up. The set-back burn they se ll will be from the top (last coal frame up in the pit), and last one sold will be the ones in the bottom (first coal put in the pit), therefore LIFO.
There are many other industries with a standardized setting where the last one put in would be the first one sold. 4. The automobile school principal would non be wrong to use LIFO, however the automobile dealer should bring FIFO for tax benefits over LIFO. The hardware dealer is reflecting prices as if it was using the LIFO method, therefore you cannot consider this as FIFO. 5. a. well-grounded b. Valid c. Valid on certain conditions. The amount of descent canno t ontogenesis/decrease and taxes needs to b! e unchanged. A endorsement of finance, you may want to consider the present value. Perhaps earning more(prenominal)(prenominal) notes on the first year is valued more than earning more in the second year.If you want to get a well-favored essay, order it on our website: OrderCustomPaper.com
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