Subject :- Accounting The Canton Corporation shows the following income statement. The firm uses FIFO Inventory accounting.CANTON CORPORATIONIncome Statement for 20X1$ 126,00073,500$ 52,5007,56012,700$ 32,2409,672$ 22,568SalesCost of goods soldGross profitSelling and administrative expenseDepreciationOperating profitTaxes (30%)Aftertax incomeAftertax income(10,500 units at $12.00)(10,500 units at $7.00)a. Assume in 20X2 the same 10,500-unit volume is maintained but that the sales price increases by 10 percent. Because of FIFOinventory policy, old inventory will still be charged off at $7.00 per unit. Also assume selling and administrative expense will be 6percent of sales and depreciation will be unchanged. The tax rate is 30 percent. Compute aftertax income for 20x2.Note: Do not round intermediate calculations. Round your answer to the nearest whole number. b. In part a, by what percent did aftertax income increase as a result of a 10 percent increase in the sales price?Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.Aftertax income increased by%c. Now assume that in 20X3 the volume remains constant at 10,500 units, but the sales price decreases by 15 percent from its year20X2 level. Also, because of FIFO inventory policy, cost of goods sold reflects the inflationary conditions of the prior year and is$7.50 per unit. Further, assume selling and administrative expense will be 6 percent of sales and depreciation will be unchanged.The tax rate is 30 percent. Compute the aftertax income.Note: Round the sales price per unit to 2 decimal places but do not round any other intermediate calculations. Round your finalanswer to the nearest whole dollar amount.Aftertax income

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Description: Subject :- Accounting The Canton Corporation shows the following income statement. The firm uses FIFO Inventory accounting.CANTON CORPORATIONIncome Statement for 20X1$ 126,00073,500$ 52,5007,56012,700$ 32,2409,672$ 22,568SalesCost of goods soldGross

An income statement is a financial report that indicates the revenue and expenses of a business. It…

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Accounting

The Canton Corporation shows the following income statement. The firm uses FIFO inventory accounting. CANTON CORPORATION Income Statement for 20X1 $ 126,000 73,500 $ 52,500 Sales Cost of goods sold Gross profit Selling and administrative expense Depreciation Operating profit Taxes (30%) Aftertax income 7,560 12,700 $ 32,240 9,672 $ 22,568 Aftertax income (10,500 units at $12.00) (10,500 units at $7.00) a. Assume in 20X2 the same 10,500-unit volume is maintained but that the sales price increases by 10 percent. Because of FIFO inventory policy, old inventory will still be charged off at $7.00 per unit. Also assume selling and administrative expense will be 6 percent of sales and depreciation will be unchanged. The tax rate is 30 percent. Compute aftertax income for 20x2. Note: Do not round intermediate calculations. Round your answer to the nearest whole number.

The Canton Corporation shows the following income statement. The firm uses FIFO inventory accounting. CANTON CORPORATION Income Statement for 20X1 $ 126,000 73,500 $ 52,500 Sales Cost of goods sold Gross profit Selling and administrative expense Depreciation Operating profit Taxes (30%) Aftertax income 7,560 12,700 $ 32,240 9,672 $ 22,568 Aftertax income (10,500 units at $12.00) (10,500 units at $7.00) a. Assume in 20X2 the same 10,500-unit volume is maintained but that the sales price increases by 10 percent. Because of FIFO inventory policy, old inventory will still be charged off at $7.00 per unit. Also assume selling and administrative expense will be 6 percent of sales and depreciation will be unchanged. The tax rate is 30 percent. Compute aftertax income for 20x2. Note: Do not round intermediate calculations. Round your answer to the nearest whole number.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 22Q: The following is select account information for August Sundries. Sales: $850,360; Sales Returns and...

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