The management of Swifty Inc. 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: Inventories Beginning (8,000 units) Ending (13,000 units) Purchases were made quarterly as follows. Quarter Units 1 50,000 40,000 2 3 4 $32,000 40,000 60,000 190,000 Unit Cost $4.20 4.35 4.50 4.70 Purchases and Sales Total net sales (185,000 units) Total cost of goods purchased (190,000 units) Total Cost $210,000 174,000 180,000 282,000 $846,000 Operating expenses were $130,000, and the company's income tax rate is 40%. $1,137,750 846,000
The management of Swifty Inc. 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: Inventories Beginning (8,000 units) Ending (13,000 units) Purchases were made quarterly as follows. Quarter Units 1 50,000 40,000 2 3 4 $32,000 40,000 60,000 190,000 Unit Cost $4.20 4.35 4.50 4.70 Purchases and Sales Total net sales (185,000 units) Total cost of goods purchased (190,000 units) Total Cost $210,000 174,000 180,000 282,000 $846,000 Operating expenses were $130,000, and the company's income tax rate is 40%. $1,137,750 846,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The management of Swifty Inc. 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:
Inventories
Beginning (8,000 units)
Ending (13,000 units)
Purchases were made quarterly as follows.
Quarter Units
1
50,000
40,000
2
3
4
$32,000
40,000
60,000
190,000
Unit Cost
$4.20
4.35
4.50
4.70
Purchases and Sales
Total net sales (185,000 units)
Total cost of goods purchased (190,000 units)
Total Cost
$210,000
174,000
180,000
282,000
$846,000
Operating expenses were $130,000, and the company's income tax rate is 40%.
$1,137,750
846,000
Transcribed Image Text:Prepare comparative condensed income statements for 2022 under FIFO and LIFO.
Sales Revenues
Beginning Inventory
Cost of Goods Purchased
Ending Inventory
Cost of Goods Sold
Gross Profit/(Loss)
Operating Expenses
Income before Income Taxes
Income Tax Expense
Net Income /(Loss)
SWIFTY INC.
Condensed Income Statements
For the Year Ended December 31, 2022
>
LA
LA
FIFO
0000000000
SA
SA
LIFO
000000000
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