Reported Income Before Income Taxes Excess of LIFO Cost of Goods Sold Over FIFO Cost of Goods Sold Adjusted Income Before Income Taxes Year Prior to 2019 2019 $240,000 80,000 70,000 $42,000 18,000 16,000 $282,000 98,000 2020 The tax rate is 21%. Flynne has a simple capital structure and 10,000 shares of common stock outstanding. Assume that the balance in retained earnings is the sum of the company's reported income amounts (net of tax) and that the reported income before income taxes in 2020 uses the newly adopted method. Flynne's revenues for 2019 and 2020 were $225,000 and $230,000, respectively. Flynne's operating expenses (other than cost of goods sold) for 2019 and 2020 were $32,000 and $40,000, respectively.
At the begining of 2020, Flynne Company decided to change from the LIFO to the FIFO inventory cost flow assumption. The following data are available: 1. Prepare the
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