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1. For each of the following situations, identify the inventory method that you would use or, given the use of a particular method, state the strategy that you would follow to accomplish your goal:

1. Inventory costs are increasing. Your company uses weighted-average cost and is having an unexpectedly good year. It is near year-end, and you need to keep net income from increasing too much in order to save on income tax.
2. Suppliers of your inventory are threatening a labour strike, and it may be difficult for your company to obtain inventory. This situation could increase your income taxes.
3. Inventory costs are decreasing, and your company’s board of directors wants to minimize income taxes.
4. Inventory costs are increasing, and the company prefers to report high income. e. Inventory costs have been stable for several years, and you expect costs to remain stable for the indefinite future. (Give the reason for your choice of method.)

2.Homework Q Search in Document Home Insert Design Layout References Mailings Review View Zotero Share Times New R... 16 A- A A abe. A + AaBbCcDdEe Aa BbCcDc AaBbCcDdE AaBb AaBbceDdEt AaBbCcDdEe Normal Paste B I Uabe Xx? A A += No Spacing Heading 1 Heading 2 Title Subtitle Styles Pane Mr. T has asked you to prepare his tax return. Mr. T is an employee of AT&T, as a technical support expert, and he runs a part-time business offering consulting services. He also has an investment in some rental properties, which has been losing money due to high interest costs. Mr. T also day-trades in stock, and has earned capital gains and some losses. Mr. T has a $3,000 RRSP deduction available as a subdivision e deduction. Two years ago, Mr. T suffered a very serious loss on his rental properties, and has a Non-capital Loss carryover that he is going to take as a Division C deduction. The only Division E benefit that Mr. I will have is the basic personal tax credit. What will Mr. T's Federal Tax payable be, based on the following additional information? $100,000 Employment income Employment deductions $2,000 Income from business $2,000 Capital gains on stocks $20,000 O Capital losses on stocks $10,000 Page 3 of 5 651 words English (United States) O Focus + 133%
w Homework Q Search in Document Home Insert Design Layout References Mailings Review View Zotero Share Times New R... 16 A- A A. abe A A+ T AaBbCcDdEe AaBbCcDdEe AaBbCcDc AaBbccDdEt AaBbc AabbCeDd Ee Paste B I Uabe Xx? A Normal No Spacing Heading 1 Heading 2 Title Subtitle Styles Pane What will Mr. T's Federal Tax payable be, based on the following additional information? Employment income $100,000 Employment deductions $2,000 O Income from business $2,000 Capital gains on stocks $20,000 Capital losses on stocks $10,000 Loss on rental properties $5,000 Non-capital loss carryover $20,000 Complete the following table to present the solution, showing the Part, Division and Subdivision for each item required in the table: Part Division Subdivision Description Amount Page 3 of 5 651 words English (United States) D Focus + 133%

3.

Suppose Holt Renfrew, the specialty retailer, had these records for ladies’ evening gowns during 2017.

• Beginning inventory (30 @ $1,000)    $ 30,000
• Purchase in February (25 @ $1,100) 27,500
• Purchase in June (60 @ $1,200)         72,000

• Purchase in December (25 @ $1,300) 32,500

• Goods available                                  $162,000

Assume sales of evening gowns totalled 130 units during 2017 and that Holt uses the weighted-average-cost method under the periodic inventory system to account for inventory. The income tax rate is 30%.

Requirements:

1. Compute Holt’s cost of goods sold for evening gowns in 2017.

2. Compute what cost of goods sold would have been if Holt had purchased enough inventory in December—at $1,300 per evening gown—to keep year-end inventory at the same level it was at the beginning of the year, 30 units.