Purchase on income before income taxes

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AAA Hardware uses the LIFO method to value its inventory. Inventory at the beginning of the year consisted of 11,400 units of the company's one product. These units cost $20 each. During the year, 60,300 units were purchased at a cost of $28 each and 64,700 units were sold. Near the end of the fiscal year, management is considering the purchase of an additional 7,000 units at $28.

(a) What would be the effect of this purchase on income before income taxes? (Leave no cells blank - be certain to select "No effect" wherever required. Omit the "tiny_mce_markerquot; sign in your response.)

Reference no: EM13126571

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