Scoresby Inc. uses a perpetual inventory system. The company's accounting records provided the following information for product B at December 31, the end of the current fiscal year. Transactions a. Inventory, December 31, prior year For the current year: b. Purchase, March 5 Units 7,000 Unit Cost $ 8 19,000 9 10,000 8,000 16,000 11 f. Operating expenses (excluding income tax expense), $500,000 c. Sale, June 15 ($29 each) d. Purchase, September 19 e. Sale, November 20 ($31 each) Required: 1. Prepare a statement of earnings for the current year through pretax earnings, showing the detailed computation of cost of sales for two cases: a. Case A-FIFO b. Case B-Weighted average (Round intermediate calculations to 2 decimal place.) × Answer is complete but not entirely correct. SCORESBY INC. Statement of Earnings For the Year Ended December 31, Current Year Case A Case B FIFO Weighted Average Sales revenue $ 786,000 $ 786,000 Cost of sales: Beginning inventory 56,000 56,000 Purchases 259,000 258,840 × Goods available for sale 315,000 314,840 Ending inventory 88,000 74,118 x Cost of sales 227,000 240,722 Gross profit 559,000 545,278 Expenses 500,000 500,000 Pretax earnings $ 59,000 $ 45,278 2. Compare the two cases with regard to the pretax earnings and the ending inventory amounts. Answer is complete but not entirely correct. Comparison of Amounts Case A FIFO Pretax earnings $ 59,000 $ Case B Weighted Average 45,278 x Difference 13,722 x Ending Inventory 88,000 74,118 x Difference 13,882 x Scoresby Inc. uses a perpetual inventory system. The company's accounting records provided the following information for product B at December 31, the end of the current fiscal year. Transactions a. Inventory, December 31, prior year For the current year: b. Purchase, March 5 c. Sale, June 15 ($29 each) d. Purchase, September 19 e. Sale, November 20 ($31 each) f. Operating expenses (excluding income tax expense), $500,000 Units 7,000 Unit Cost $ 8 19,000 9 10,000 8,000 16,000 11 Required: 1. Prepare a statement of earnings for the current year through pretax earnings, showing the detailed computation of cost of sales for two cases: a. Case A-FIFO b. Case B-Weighted average (Round intermediate calculations to 2 decimal place.) × Answer is complete but not entirely correct. SCORESBY INC. Statement of Earnings For the Year Ended December 31, Current Year Case A Case B FIFO Weighted Average $ 786,000 $ 786,000 Sales revenue Cost of sales: Beginning inventory 56,000 56,000 Purchases 259,000 258,840 x Goods available for sale 315,000 314,840 Ending inventory 88,000 74,080 x Cost of sales 227,000 240,760 Gross profit 559,000 545,240 Expenses 500,000 500,000 Pretax earnings $ 59,000 $ 45,240 2. Compare the two cases with regard to the pretax earnings and the ending inventory amounts. Answer is complete but not entirely correct. Comparison of Amounts Pretax earnings Difference Ending Inventory Difference Case A FIFO Case B Weighted Average 59,000 $ 45,240 × 13,760 × 88,000 74,080 x 13,920 ×