Use the following information to complete this exercise: sales, 950 units for $20,400; beginning inventory, 700 units; purchases, 800 units; ending inventory, 550 units; and operating expenses, $7,800. Required: 1. Complete the table for each situation. In Situations A and B (costs rising), assume the following: beginning inventory, 700 units at $8 = $5,600; purchases, 800 units at $10 = $8,000. In Situations C and D (costs falling), assume the opposite; that is, beginning inventory, 700 units at $10 = $7,000; purchases, 800 units at $8 = $6,400. Use periodic inventory procedures. Sales Revenue Beginning Inventory Purchases Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense (30%) Net Income Situation A FIFO $ 5,600 8,000 13,600 5,500 Costs Rising $ 20,400 $ 8,100 12,300 7,800 4,500 1,350 3,150 Situation B LIFO $ 0 20,400 0 7,800 Situation C FIFO 0 Costs Falling $ 20,400 0 7,800 Situation D LIFO $ 0 20,400 0 7,800

Use the following information to complete this exercise: sales, 950 units for $20,400; beginning inventory, 700 units; purchases, 800 units; ending inventory, 550 units; and operating expenses, $7,800. Required: 1. Complete the table for each situation. In Situations A and B (costs rising), assume the following: beginning inventory, 700 units at $8 = $5,600; purchases, 800 units at $10 = $8,000. In Situations C and D (costs falling), assume the opposite; that is, beginning inventory, 700 units at $10 = $7,000; purchases, 800 units at $8 = $6,400. Use periodic inventory procedures. Sales Revenue Beginning Inventory Purchases Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense (30%) Net Income Situation A FIFO $ 5,600 8,000 13,600 5,500 Costs Rising $ 20,400 $ 8,100 12,300 7,800 4,500 1,350 3,150 Situation B LIFO $ 0 20,400 0 7,800 Situation C FIFO 0 Costs Falling $ 20,400 0 7,800 Situation D LIFO $ 0 20,400 0 7,800

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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