Volata Company began operations on January 1, 2019. In the second quarter of 2020, It adopted the FIFO method of Inventory valuation. In the past, it used the LIFO method. The company's interim income statements as originally reported under the LIFO method follow: Sales Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (25%) Net income cost of goods sold (FIFO) 1sto $ 31,000 6,100 4,100 7,100 4,300 $ 21,600 5,400 $ 20,800 5,200 $ 15,600 $ 16,200 Net income Net income per common share 2ndq $ 33,000 2019 If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows: 1stQ 2ndQ 3rdQ $5,900 $6,700 $7,300 Three Months Ended June 30 2019 2020 2019 S 3rdQ $ 35,000 7,900 4,700 $ 22,400 5,600 $ 16,800 Answer is not complete. 18,300 s 18.30 4thQ $ 37,000 9,100 5,100 $ 22,000 5,700 $ 17,100 Sales for the second quarter of 2020 are $41,000, cost of goods sold under the FIFO method is $11,100, and operating expenses are $5,500. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2020 (Round "Earnings per share" answers to 2 decimal places.) 2020 1sto $ 39,000 10,600 5,300 4thQ $ 8,100 Six Months Ended June 30 2019 2020 $ 23,100 5,775 $ 17,325 2020 15tQ $9,500
Volata Company began operations on January 1, 2019. In the second quarter of 2020, It adopted the FIFO method of Inventory valuation. In the past, it used the LIFO method. The company's interim income statements as originally reported under the LIFO method follow: Sales Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (25%) Net income cost of goods sold (FIFO) 1sto $ 31,000 6,100 4,100 7,100 4,300 $ 21,600 5,400 $ 20,800 5,200 $ 15,600 $ 16,200 Net income Net income per common share 2ndq $ 33,000 2019 If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows: 1stQ 2ndQ 3rdQ $5,900 $6,700 $7,300 Three Months Ended June 30 2019 2020 2019 S 3rdQ $ 35,000 7,900 4,700 $ 22,400 5,600 $ 16,800 Answer is not complete. 18,300 s 18.30 4thQ $ 37,000 9,100 5,100 $ 22,000 5,700 $ 17,100 Sales for the second quarter of 2020 are $41,000, cost of goods sold under the FIFO method is $11,100, and operating expenses are $5,500. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2020 (Round "Earnings per share" answers to 2 decimal places.) 2020 1sto $ 39,000 10,600 5,300 4thQ $ 8,100 Six Months Ended June 30 2019 2020 $ 23,100 5,775 $ 17,325 2020 15tQ $9,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Volata Company began operations on January 1, 2019. In the second quarter of 2020, It adopted the FIFO method of inventory
valuation. In the past, It used the LIFO method. The company's interim income statements as originally reported under the LIFO
method follow:
Sales
Cost of goods sold (LIFO)
Operating expenses
Income before income taxes
Income taxes (25%)
Net income
Cost of goods sold (FIFO)
1stQ
$ 31,000
6,100
4,100
$ 20,800
5,200
$ 15,600
Net income
Net income per common
share:
1stQ
$5,900
2ndQ
$ 33,000
7,100
4,300
Three Months
Ended June 30
2019
2020
$ 21,600
5,400
$ 16,200
S
2019
18,300
S 18.30
2019
3rdQ
$ 35,000
Answer is not complete.
7,900
4,700
If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would
have been as follows
$ 22,400
5,600
$ 16,800
2ndQ 3rdQ
$6,700 $7,300
4thQ
$ 37,000
9,100
5,100
$ 22,800
5,700
$ 17,100
Six Months
Ended June 30
2019
2020
4thQ
$ 8,100
Sales for the second quarter of 2020 are $41,000, cost of goods sold under the FIFO method is $11,100, and operating expenses are
$5,500. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding
2020
1stQ
$ 39,000
Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and
the six-month period ended June 30, 2020. (Round "Earnings per share" answers to 2 decimal places.)
10,600
5,300
$ 23,100
5,775
$ 17,325
2020
1stQ
$9,500
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