Income is to be evaluated under four different situations as follows:a. Prices are rising:(1) Situation A: FIFO is used.(2) Situation B: LIFO is used.b. Prices are falling:(1) Situation C: FIFO is used.(2) Situation D: LIFO is used.The basic data common to all four situations are sales, 530 units for $21,200; beginning inventory, 300 units; purchases, 380 units;ending inventory, 150 units; and operating expenses, $3,900. The income tax rate is 40%.Required:1. Complete the following tabulation for each situation. In Situations A and B (prices rising), assume the following: beginninginventory, 300 units at $12 = $3,600; purchases, 380 units at $14 = $5,320. In Situations C and D (prices falling), assume theopposite; that is, beginning inventory, 300 units at $14 = $4,200; purchases, 380 units at $12 = $4,560. Use periodic inventoryprocedures.2. Complete the following sentence:3. Complete the following sentence regarding the relative effects on the cash position for each situation.Complete this question by entering your answers in the tabs below.Required 1 Required 2 Required 3Complete the following tabulation for each situation. In Situations A and B (prices rising), assume the following: beginninginventory, 300 units at $12 = $3,600; purchases, 380 units at $14 = $5,320. In Situations C and D (prices falling), assumethe opposite; that is, beginning inventory, 300 units at $14 = $4,200; purchases, 380 units at $12 = $4,560. Use periodicinventory procedures. (Round your answers to nearest dollar amount.)Sales revenueCost of goods sold:Beginning inventoryPurchasesGoods available for saleEnding inventoryCost of goods soldGross profitExpensesPretax incomeIncome tax expenseNet incomeSituation AFIFO$PRICES RISING$21,200 $3,6005,3208,9202,1006,820Situation BLIFO14,3803,90010,4804,1926,28821,200 $3,900Required 1PRICES FALLINGSituation DLIFOSituation CFIFO21,200 $3,90021,200Required?3,900Show less

Inventory Valuation is a method of calculating the value of stock at the end of an accounting…

Required: 1. Complete the following tabulation for each situation. In Situations A and B (prices rising), assume the following: beginning inventory, 300 units at $12= $3,600; purchases, 380 units at $14 = $5,320. In Situations C and D (prices falling), assume the opposite; that is, beginning inventory, 300 units at $14 = $4,200; purchases, 380 units at $12 = $4,560. Use periodic inventory procedures. 2. Complete the following sentence: 3. Complete the following sentence regarding the relative effects on the cash position for each situation.

Required: 1. Complete the following tabulation for each situation. In Situations A and B (prices rising), assume the following: beginning inventory, 300 units at $12= $3,600; purchases, 380 units at $14 = $5,320. In Situations C and D (prices falling), assume the opposite; that is, beginning inventory, 300 units at $14 = $4,200; purchases, 380 units at $12 = $4,560. Use periodic inventory procedures. 2. Complete the following sentence: 3. Complete the following sentence regarding the relative effects on the cash position for each situation.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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