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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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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UMET's Stores had the following inventory transactions in 2020: Transaction Units Cost per unit 1/1 Balance 50 $6 2/14 Sale 25 5/23 Purchase 100 8 8/21 Sale 50 11/5 Purchase 25 12 11/18 Sale 95 Required: Compute tge cost of goods sold and the ending inventory using the periodic inventory system for each of the following cost flow assumptions: a. FIFO b. LIFO c. Weighted average