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LIFO & FIFO problems

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Nu Company reported the following pre-tax data:

Net Sales 2800
Cost of Goods available for sale 2500
Operating Expenses 880
Effective tax rate 40%
Ending Inventories:
If LIFO is elected 820
If FIFO is elected 1060

1. What is Nu's gross profit percentage if it elects LIFO?
2. Wat is Nu's net income if it elects FIFO? LIFO?

I don't even know where to begin. I think the gross profit is $300 but I am not sure about figuring a gross profit %.

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Solution Summary

The solution explains the calculation of gross profit under LIFO and FIFO inventory methods.

Solution Preview

The gross profit is sales - cost of goods sold.
Cost of goods sold is opening inventory+purchases-closing inventory.
Opening inventory + purchases = goods available for ...

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