I posted a similar question before, but now my numbers are different. Broadhead
ID: 2563432 • Letter: I
Question
I posted a similar question before, but now my numbers are different.
Broadhead Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2:
Required:
1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO.
2. Compute the difference between the pretax income and the ending inventory amount for the two cases.
(Again, the chart won't upload properly, but please help,thank you.)
Units Unit Cost Inventory, December 31, prior year 2,920 $ 13 For the current year: Purchase, April 11 8,940 11 Purchase, June 1 7,900 16 Sales ($57 each) 10,820 Operating expenses (excluding income tax expense) $ 190,000Required:
1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO.
2. Compute the difference between the pretax income and the ending inventory amount for the two cases.
(Again, the chart won't upload properly, but please help,thank you.)
Explanation / Answer
1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO.
2. Compute the difference between the pretax income and the ending inventory amount for the two cases
FIFO LIFO Sales 616740 616740 Less: Cost of goods sold Beginning inventory 37960 37960 Add: Purchase 224740 224740 Cost of goods available for sale 262700 262700 Less : Ending inventory (137840) (104180) Cost of goods sold (124860) (158520) Gross profit 491880 458220 Less: Operating expenses (190000) (190000) Income before tax 301880 268220