The management of Carla Vista Inc. asks your help in determining the comparative effects of the FIFO and LIFO inventory cost flow methods. For 2025, the accounting records show these data. They use the periodic inventory system. Inventory, January 1 (14,500 units) Cost of 123,000 units purchased Selling price of 95,000 units sold Operating expenses Units purchased consisted of 35,000 units at $3.20 on May 10, 63,000 units at $3.40 on August 15, and 25,000 units at $3.70 on November 20. Income taxes are 26%. (a) Prepare comparative condensed income statements for 2025 under FIFO and LIFO. Sales Revenue Cost of Goods Sold Beginning inventory Cost of Goods Purchased Cost of Goods Available for Sale Less Ending Inventory Cost of Goods Sold Gross Profit/(Loss) Operating Expenses Income before income Taxes Income Tax Expense $43,500 418,700 727,000 123,000 Net Income/(Loss) Carla Vista Inc. Condensed Income Statements For the Year Ended December 31, 2025 FIFO 727,000 43.500 418.700 462,200 306.700 155500 571500 123000 448,500 116.610 331890 $ $ LIFO 727,000 43,500 418,700 462.200 155.500 306700 420300 123000 297300 77298 220002

The management of Carla Vista Inc. asks your help in determining the comparative effects of the FIFO and LIFO inventory cost flow methods. For 2025, the accounting records show these data. They use the periodic inventory system. Inventory, January 1 (14,500 units) Cost of 123,000 units purchased Selling price of 95,000 units sold Operating expenses Units purchased consisted of 35,000 units at $3.20 on May 10, 63,000 units at $3.40 on August 15, and 25,000 units at $3.70 on November 20. Income taxes are 26%. (a) Prepare comparative condensed income statements for 2025 under FIFO and LIFO. Sales Revenue Cost of Goods Sold Beginning inventory Cost of Goods Purchased Cost of Goods Available for Sale Less Ending Inventory Cost of Goods Sold Gross Profit/(Loss) Operating Expenses Income before income Taxes Income Tax Expense $43,500 418,700 727,000 123,000 Net Income/(Loss) Carla Vista Inc. Condensed Income Statements For the Year Ended December 31, 2025 FIFO 727,000 43.500 418.700 462,200 306.700 155500 571500 123000 448,500 116.610 331890 $ $ LIFO 727,000 43,500 418,700 462.200 155.500 306700 420300 123000 297300 77298 220002

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Description: The management of Carla Vista Inc. asks your help in determining the comparative effects of the FIFO and LIFO inventory cost flowmethods. For 2025, the accounting records show these data. They use the periodic inventory system.Inventory, January 1 (

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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What should Cake report as cost of goods sold for 2022? * Cake Company sells one product which it purchases from various suppliers. The trial balance on December 31, 2022 included the following accounts: Sales (100,000 units at P150) Sales discount Purchase Purchase discount The inventory purchases during 2022 were as follows: Beginning inventory, January 1 Purchases, quarter ended March 31 Purchases, quarter ended June 30 Purchases, quarter ended Sept. 30 Purchases, quarter ended Dec. 31 Units 20,000 30,000 40,000 50,000 10,000 150,000 Unit cost 60 65 70 75 15,000,000 1,000,000 9,300,000 400,000 80 Total cost 1,200,000 1,950,000 2,800,000 3,750,000 800,000 10,500,000 Cake's accounting policy is to report inventory in its financial statements at the lower of cost or net realizable value. Cost is determined under the first-out method. Cake has determined that, on December 31, 2022, the replacement cost of its inventory was P70 per unit and the net realizable value was P72 per unit. The…
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Simple Plan Enterprises uses a perlodic Inventory system. Its records showed the following: Inventory, December 31, using FIFO - 44 Units @ $17 = $748 Inventory, December 31, using LIFO – 44 Units @ $13 = $572 Transactions in the Following Year Purchase, January 9 Purchase, January 20 Sale, January 11 (at $41 per unit) Sale, January 27 (at $42 per unit) Units Unit Cost Total Cost $ 1,088 2,014 56 18 106 19 86 62 Required: 1. Compute the number and cost of goods avallable for sale, the cost of ending Inventory, and the cost of goods sold under FIFO and LIFO. 2 Compute the Inventory turnover ratio under the FIFO and LIFO Inventory costing methods. 3. Does the Inventory method used make a significant difference In the Inventory turnover ratlo? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the number and cost of goods available for sale, the cost of ending inventory, and the cost of goods sold under FIFO and LIFO. FIFO LIFO…
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The following information was available from the inventory records of the Lunacia Company for January 2021: Units Unit Cost Total CostBalance, January 01, 2021 2000 9,775.00 19,550.00 Purchases: January 06, 2021 1500 10,300.00 15,450.00 January 26, 2021 3400 10,750.00 36,550.00 Sales January 07, 2021 1800 January 31, 2021 3200 Balance, January 31, 2021 1900 Assuming that Lunacia does not maintain perpetual inventory records, what should be the inventory at January 31, 2021, using the average cost inventory method rounded to the nearest peso?