Presented below are income statements prepared on a LIFO and FIFO basis for Martinez Company, which started operations on January 1, 2024. The company presently uses the LIFO method of pricing its inventory and has decided to switch to the FIFO method in 2025. The FIFO income statement is computed in accordance with the requirements of GAAP. Martinez's profit-sharing agreement with its employees indicates that the company will pay employees 10% of income before profit-sharing. Income taxes are ignored. Sales revenue Cost of goods sold Operating expenses Income before profit-sharing Profit-sharing expense Net income Answer the following questions. (a). (c) LIFO Basis 2025 $3,070 1,180 960 930 93 2024 $3,070 950 960 | 1,160 116 $837 $1.044 FIFO Basis 2025 $3,070 1,160 960 950 99 2024 MARTINEZ COMPANY Retained Earnings Statement $3,070 $ 910 960 1,200 $851 $1,084 116 Assume that Martinez has a beginning balance of retained earnings at January 1, 2025, of $1,044 using the LIFO method. The company declared and paid dividends of $500 in 2025. Prepare the retained earnings statement for 2025, assuming that Martinez has switched to the FIFO method.

Presented below are income statements prepared on a LIFO and FIFO basis for Martinez Company, which started operations on January 1, 2024. The company presently uses the LIFO method of pricing its inventory and has decided to switch to the FIFO method in 2025. The FIFO income statement is computed in accordance with the requirements of GAAP. Martinez's profit-sharing agreement with its employees indicates that the company will pay employees 10% of income before profit-sharing. Income taxes are ignored. Sales revenue Cost of goods sold Operating expenses Income before profit-sharing Profit-sharing expense Net income Answer the following questions. (a). (c) LIFO Basis 2025 $3,070 1,180 960 930 93 2024 $3,070 950 960 | 1,160 116 $837 $1.044 FIFO Basis 2025 $3,070 1,160 960 950 99 2024 MARTINEZ COMPANY Retained Earnings Statement $3,070 $ 910 960 1,200 $851 $1,084 116 Assume that Martinez has a beginning balance of retained earnings at January 1, 2025, of $1,044 using the LIFO method. The company declared and paid dividends of $500 in 2025. Prepare the retained earnings statement for 2025, assuming that Martinez has switched to the FIFO method.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Please answer G part with explanation. Answer was incoorect in previous solution
What are the problems caused by lack of integration? Expalin.
Using a service often results in possession and ownership. Select one: O a. True. X b. False.
explain the fill answer
*Question:- r what is anticulation of the Pinarcial statement meons Elaborate.
did not fully awnser question
What is the formula used for the questions without using excel?
help please, the answers I put are not correct
Briefly discuss the nature of Single entry and double entry system.
Types of gap and give example with interpretation.