Tulip Company decided to change from LIFO to FIFO inventory costing, effective January 1, 2020. The following data were available: Year Pretax Operating Excess of FIFO Ending Inventory Income using LIFO over LIFO Ending Inventory 2020 $40,000 $8,000 2019 20,000 7,000 2018 30,000 4,000 The income tax rate is 35%. The company began operations on January 1, 2018, and has paid no dividends since inception. Year Pretax Operating Excess of FIFO Ending Inventory Income using LIFO over LIFO Ending Inventory 2020 $40,000 $8,000 2019 20,000 7,000 2018 30,000 4,000 The income tax rate is 35%. The company began operations on January 1, 2018, and has paid no dividends since inception. c. Prepare the 2019 statement of retained earnings as it would appear in the comparative 2019-2020 financial statements. Retained Earnings Instructions Tulip Company Statement of Retained Earnings ✔ 1 2 3 4 5 ✔
Tulip Company decided to change from LIFO to FIFO inventory costing, effective January 1, 2020. The following data were available: Year Pretax Operating Excess of FIFO Ending Inventory Income using LIFO over LIFO Ending Inventory 2020 $40,000 $8,000 2019 20,000 7,000 2018 30,000 4,000 The income tax rate is 35%. The company began operations on January 1, 2018, and has paid no dividends since inception. Year Pretax Operating Excess of FIFO Ending Inventory Income using LIFO over LIFO Ending Inventory 2020 $40,000 $8,000 2019 20,000 7,000 2018 30,000 4,000 The income tax rate is 35%. The company began operations on January 1, 2018, and has paid no dividends since inception. c. Prepare the 2019 statement of retained earnings as it would appear in the comparative 2019-2020 financial statements. Retained Earnings Instructions Tulip Company Statement of Retained Earnings ✔ 1 2 3 4 5 ✔
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Tulip Company decided to change from LIFO to FIFO inventory costing, effective January 1, 2020. The following data were available:
|
Year
|
Pretax Operating
|
Excess of FIFO Ending Inventory
|
|
Income using LIFO
|
over LIFO Ending Inventory
|
|
| 2020 | $40,000 | $8,000 |
| 2019 | 20,000 | 7,000 |
| 2018 | 30,000 | 4,000 |
The income tax rate is 35%. The company began operations on January 1, 2018, and has paid no dividends since inception.
|
Year
|
Pretax Operating
|
Excess of FIFO Ending Inventory
|
|
Income using LIFO
|
over LIFO Ending Inventory
|
|
| 2020 | $40,000 | $8,000 |
| 2019 | 20,000 | 7,000 |
| 2018 | 30,000 | 4,000 |
The income tax rate is 35%. The company began operations on January 1, 2018, and has paid no dividends since inception.
c. Prepare the 2019 statement of retained earnings as it would appear in the comparative 2019-2020 financial statements.
Retained Earnings Instructions
|
Tulip Company
|
|
Statement of Retained Earnings
|
|
✔
|
|
1
|
|
|
|
2
|
|
|
|
3
|
|
|
|
4
|
|
|
|
5
|
|
✔
|
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