USA Inventory Credit

[Taffy]

My co-worker (A) is trying to determine when is the best time to drop some old inventory based on how it will affect his department's bottom line. I would think even if sales are slow dropping inventory will increase his gross sales. I am sure I am missing something. Another co-worker (B) mentioned that dropping inventory in one period would give co-worker (A) a credit in the following period. I've created a sample income statement using the COGS formula to try to work this out in my brain. Any advice on comprehending this concept?

 

[Drmdcpa]

Your question sounds like it comes from a text book. It also does not make any sense. Show your work.

 

[Suzette Porter]

Please post your own question so that we can help you better.