Courtney Company uses a periodic Inventory system. The following data were available: beginning inventory, 2,100 units at $30; purchases, 4,900 units at $35; operating expenses (excluding income taxes), $97,000; ending inventory per physical count at December 31, 1,300 units; sales price per unit, $75; and average income tax rate, 30% Required: 1. Complete the income statements and the cost of goods sold calculation under the FIFO, LIFO, and weighted average costing methods. 2-a. Between FIFO and LIFO, which method is preferable in terms of maximizing income from operations, if costs are rising? 2-b. Between FIFO and LIFO, which method is preferable in terms of minimizing income taxes, if costs are rising? 3-a. Between FIFO and LIFO, which method is preferable in terms of maximizing income from operations, if costs are falling? 3-b. Between FIFO and LIFO, which method is preferable in terms of minimizing income taxes, if costs are falling? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3A Req 3B Complete the income statements and the cost of goods sold calculation under the FIFO, LIFO, and weighted average costing methods. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.) Income Statement Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense Net Income *Cost of Goods Sold Equation Beginning Inventory Purchases Goods Available for Sale Ending Inventory Units FIFO Inventory Costing Method LIFO Weighted Average
Courtney Company uses a periodic Inventory system. The following data were available: beginning inventory, 2,100 units at $30; purchases, 4,900 units at $35; operating expenses (excluding income taxes), $97,000; ending inventory per physical count at December 31, 1,300 units; sales price per unit, $75; and average income tax rate, 30% Required: 1. Complete the income statements and the cost of goods sold calculation under the FIFO, LIFO, and weighted average costing methods. 2-a. Between FIFO and LIFO, which method is preferable in terms of maximizing income from operations, if costs are rising? 2-b. Between FIFO and LIFO, which method is preferable in terms of minimizing income taxes, if costs are rising? 3-a. Between FIFO and LIFO, which method is preferable in terms of maximizing income from operations, if costs are falling? 3-b. Between FIFO and LIFO, which method is preferable in terms of minimizing income taxes, if costs are falling? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3A Req 3B Complete the income statements and the cost of goods sold calculation under the FIFO, LIFO, and weighted average costing methods. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.) Income Statement Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense Net Income *Cost of Goods Sold Equation Beginning Inventory Purchases Goods Available for Sale Ending Inventory Units FIFO Inventory Costing Method LIFO Weighted Average
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Courtney Company uses a periodic Inventory system. The following data were available: beginning inventory, 2,100 units at $30;
purchases, 4,900 units at $35; operating expenses (excluding income taxes), $97,000; ending inventory per physical count at
December 31, 1,300 units; sales price per unit, $75; and average income tax rate, 30%
Required:
1. Complete the income statements and the cost of goods sold calculation under the FIFO, LIFO, and weighted average costing
methods.
2-a. Between FIFO and LIFO, which method is preferable in terms of maximizing income from operations, if costs are rising?
2-b. Between FIFO and LIFO, which method is preferable in terms of minimizing income taxes, if costs are rising?
3-a. Between FIFO and LIFO, which method is preferable in terms of maximizing income from operations, if costs are falling?
3-b. Between FIFO and LIFO, which method is preferable in terms of minimizing income taxes, if costs are falling?
Complete this question by entering your answers in the tabs below.
Req 1
Req 2A
Req 2B
Req 3A
Req 3B
Complete the income statements and the cost of goods sold calculation under the FIFO, LIFO, and weighted average costing
methods. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.)
Income Statement
Sales Revenue
Cost of Goods Sold
Gross Profit
Operating Expenses
Income from Operations
Income Tax Expense
Net Income
*Cost of Goods Sold Equation
Beginning Inventory
Purchases
Goods Available for Sale
Ending Inventory
Units
FIFO
Inventory Costing Method
LIFO
Weighted
Average
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