Both the management of Oriole Instrument Corporation, a small company that follows IFRS, and its independent auditors recently concluded that the company's results of operations will be reliable and more relevant in future years if Oriole changes its method of costing inventory from FIFO to weighted average cost. The following data are a five- year income summary using FIFO and a schedule of what the inventories might have been if they had been stated using the weighted average cost method. Sales-net Cost of goods sold Oriole Instrument Corporation Statement of Income and Retained Earnings for the Years Ended May 31 2020 2021 2022 2023 $12.715 $13.672 $14,941 $15,496 Beginning inventory Purchases Ending inventory Total Gross profit Administrative expenses Income before taxes Income taxes (30%) Net income 2018 $779 (a) 2019 $11.450 820 10,660 (902) 10,578 872 574 298 89 209 989 426 Retained earnings-beginning 1.198 Retained earnings-ending $1.198 $1,624 Earnings per share $2.09 $4.26 902 820 11.398 12.300 13,038 (914) (1.014) 11,480 12.206 12,938 1.235 1,466 2003 626 682 744 609 784 183 235 (820) Oriole Instrument Corporation Schedule of Inventory Balances Using Average Cost Method Year Ended May 31 2019 2020 2021 2022 $922 $895 $1,041 $1,214 914 2023 $1,393 1,259 378 549 881 1,624 2,173 $2,173 $3,054 $5.49 $8.81 2019 1,014 14,022 (1,123) 13,913 1,583 811 772 232 540 3,054 $3,594 $5.40 Prepare comparative statements for the five years that would be suitable for inclusion in the historical summary portion of Oriole's annual report, assuming that Oriole had changed its inventory costing method to weighted average cost in 2023. Indicate the effects on net income and earnings per share for the years involved. (Round earnings per share to 2 decimal places, e.g. 52.75. Round answers to 0 decimal places, e.g. 5,275.) ORIOLE INSTRUMENTO Statement of Income and R For the Years Ende 2020
Both the management of Oriole Instrument Corporation, a small company that follows IFRS, and its independent auditors recently concluded that the company's results of operations will be reliable and more relevant in future years if Oriole changes its method of costing inventory from FIFO to weighted average cost. The following data are a five- year income summary using FIFO and a schedule of what the inventories might have been if they had been stated using the weighted average cost method. Sales-net Cost of goods sold Oriole Instrument Corporation Statement of Income and Retained Earnings for the Years Ended May 31 2020 2021 2022 2023 $12.715 $13.672 $14,941 $15,496 Beginning inventory Purchases Ending inventory Total Gross profit Administrative expenses Income before taxes Income taxes (30%) Net income 2018 $779 (a) 2019 $11.450 820 10,660 (902) 10,578 872 574 298 89 209 989 426 Retained earnings-beginning 1.198 Retained earnings-ending $1.198 $1,624 Earnings per share $2.09 $4.26 902 820 11.398 12.300 13,038 (914) (1.014) 11,480 12.206 12,938 1.235 1,466 2003 626 682 744 609 784 183 235 (820) Oriole Instrument Corporation Schedule of Inventory Balances Using Average Cost Method Year Ended May 31 2019 2020 2021 2022 $922 $895 $1,041 $1,214 914 2023 $1,393 1,259 378 549 881 1,624 2,173 $2,173 $3,054 $5.49 $8.81 2019 1,014 14,022 (1,123) 13,913 1,583 811 772 232 540 3,054 $3,594 $5.40 Prepare comparative statements for the five years that would be suitable for inclusion in the historical summary portion of Oriole's annual report, assuming that Oriole had changed its inventory costing method to weighted average cost in 2023. Indicate the effects on net income and earnings per share for the years involved. (Round earnings per share to 2 decimal places, e.g. 52.75. Round answers to 0 decimal places, e.g. 5,275.) ORIOLE INSTRUMENTO Statement of Income and R For the Years Ende 2020
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Both the management of Oriole Instrument Corporation, a small company that follows IFRS, and its independent
auditors recently concluded that the company's results of operations will be reliable and more relevant in future years
if Oriole changes its method of costing inventory from FIFO to weighted average cost. The following data are a five-
year income summary using FIFO and a schedule of what the inventories might have been if they had been stated using
the weighted average cost method.
Oriole Instrument Corporation
Statement of Income and Retained Earnings for the Years Ended May 31
2020
2021
2022
$12,715
$13,672
$14,941
Sales-net
Cost of goods sold
Beginning inventory
Purchases
Ending inventory
Total
Gross profit
Administrative expenses
Income before taxes
Income taxes (30%)
Net income
Retained earnings-beginning
Retained earnings-ending
Earnings per share
(a)
2018 2019
$779
2019
$11,450
820
10,660
(902)
10,578
872
574
298
89
902
209
989
11,398
(820)
11,480
Oriole Instrument Corporation
Schedule of Inventory Balances Using Average Cost Method
Year Ended May 31
2020 2021 2022
$922 $895 $1,041 $1,214
1,235
626
609
183
426
549
1,198
1,624
$1,198 $1,624 $2,173
$2.09
$4.26
$5.49
820
12,300
(914)
12,206
1,466
682
784
235
2023
$1,393
2019
914
13,038
(1.014)
12,938
2023
$15,496
1,014
14,022
(1,123)
13,913
1,583
811
2,003
744
1,259
772
378
232
881
540
2,173
3,054
$3,054 $3,594
$8.81
$5.40
Prepare comparative statements for the five years that would be suitable for inclusion in the historical summary
portion of Oriole's annual report, assuming that Oriole had changed its inventory costing method to weighted
average cost in 2023. Indicate the effects on net income and earnings per share for the years involved. (Round
earnings per share to 2 decimal places, e.g. 52.75. Round answers to 0 decimal places, e.g.
5,275.)
ORIOLE INSTRUMENTO
Statement of Income and R
For the Years Ende
2020
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