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The management of Sunland Company is reevaluating the appropriateness of using its present inventory cost flow method, which is average-cost. The company requests your help in determining the results of operations for 2022 if either the FIFO or the LIFO method had been used. For 2022, the accounting records show these data: Beginning (4,900 units) Ending (11,900 units) Quarter 1 Purchases were made quarterly as follows. 2 Inventories 3 4 Units 35,000 28,000 28,000 42,000 $9,800 133,000 Unit Cost $2.45 2.60 2.75 2.95 Total net sales (126,000 units) Total cost of goods purchased (133,000 units) Total Cost $85,750 72,800 77,000 Purchases and Sales 123,900 $359,450 Operating expenses were $130,000, and the company's income tax rate is 40%. $522,900 359,450

The management of Sunland Company is reevaluating the appropriateness of using its present inventory cost flow method, which is average-cost. The company requests your help in determining the results of operations for 2022 if either the FIFO or the LIFO method had been used. For 2022, the accounting records show these data: Beginning (4,900 units) Ending (11,900 units) Quarter 1 Purchases were made quarterly as follows. 2 Inventories 3 4 Units 35,000 28,000 28,000 42,000 $9,800 133,000 Unit Cost $2.45 2.60 2.75 2.95 Total net sales (126,000 units) Total cost of goods purchased (133,000 units) Total Cost $85,750 72,800 77,000 Purchases and Sales 123,900 $359,450 Operating expenses were $130,000, and the company's income tax rate is 40%. $522,900 359,450

FINANCIAL ACCOUNTING
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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Prepare comparative condensed income statements for 2022 under FIFO and LIFO. Sales Revenues Cost of Goods Sold Beginning Inventory Cost of Goods Purchased Cost of Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit/(Loss) Operating Expenses Income before Income Taxes Income Tax Expense Net Income /(Loss) Sunland Company Condensed Income Statements $ $ FIFO 522900 9800 359450 130000 $ $ LIFO 522900 9800 359450 130000
Transcribed Image Text:Prepare comparative condensed income statements for 2022 under FIFO and LIFO. Sales Revenues Cost of Goods Sold Beginning Inventory Cost of Goods Purchased Cost of Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit/(Loss) Operating Expenses Income before Income Taxes Income Tax Expense Net Income /(Loss) Sunland Company Condensed Income Statements $ $ FIFO 522900 9800 359450 130000 $ $ LIFO 522900 9800 359450 130000
The management of Sunland Company is reevaluating the appropriateness of using its present inventory cost flow method, which is average-cost. The company requests your help in determining the results of operations for 2022 if either the FIFO or the LIFO method had been used. For 2022, the accounting records show these data: Beginning (4,900 units) Ending (11,900 units) Quarter 1 Purchases were made quarterly as follows. 2 Inventories 3 4 Units 35,000 28,000 28,000 42,000 $9,800 133,000 Unit Cost $2.45 2.60 2.75 2.95 Total net sales (126,000 units) Total cost of goods purchased (133,000 units) Total Cost $85,750 72,800 77,000 123,900 Purchases and Sales $359,450 Operating expenses were $130,000, and the company's income tax rate is 40%. $522,900 359,450
Transcribed Image Text:The management of Sunland Company is reevaluating the appropriateness of using its present inventory cost flow method, which is average-cost. The company requests your help in determining the results of operations for 2022 if either the FIFO or the LIFO method had been used. For 2022, the accounting records show these data: Beginning (4,900 units) Ending (11,900 units) Quarter 1 Purchases were made quarterly as follows. 2 Inventories 3 4 Units 35,000 28,000 28,000 42,000 $9,800 133,000 Unit Cost $2.45 2.60 2.75 2.95 Total net sales (126,000 units) Total cost of goods purchased (133,000 units) Total Cost $85,750 72,800 77,000 123,900 Purchases and Sales $359,450 Operating expenses were $130,000, and the company's income tax rate is 40%. $522,900 359,450
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