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Volata Company began operations on January 1, 2023. In the second quarter of 2024, 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: Accounts Sales Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (25%) Net income Accounts Cost of goods sold (FIFO) 1st Quarter $ 30,000 6,000 4,000 Net income Earnings per share $ 20,000 5,000 $ 15,000 2023 2023 2024 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter $ 32,000 $ 34,000 $ 36,000 7,800 4,600 $ 21,600 5,400 9,000 5,000 $ 22,000 5,500 $ 16,200 $ 16,500 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: 7,000 4,200 $ 20,800 5,200 $ 15,600 Sales for the second quarter of 2024 are $40,000, cost of goods sold under the FIFO method is $11,000, and operating expenses are $5,400. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. 2023 2024 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter $ 5,800 $ 6,600 $ 7,200 $ 8,000 $ 9,400 Required: 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, 2023 and 2024. Note: Round "Earnings per share" answers to 2 decimal places. 2024 Three Months Ended June Six Months Ended June 30 30 $ 38,000 10,500 5,200 $ 22,300 5,575 $ 16,725 2023 2024

Volata Company began operations on January 1, 2023. In the second quarter of 2024, 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: Accounts Sales Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (25%) Net income Accounts Cost of goods sold (FIFO) 1st Quarter $ 30,000 6,000 4,000 Net income Earnings per share $ 20,000 5,000 $ 15,000 2023 2023 2024 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter $ 32,000 $ 34,000 $ 36,000 7,800 4,600 $ 21,600 5,400 9,000 5,000 $ 22,000 5,500 $ 16,200 $ 16,500 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: 7,000 4,200 $ 20,800 5,200 $ 15,600 Sales for the second quarter of 2024 are $40,000, cost of goods sold under the FIFO method is $11,000, and operating expenses are $5,400. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. 2023 2024 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter $ 5,800 $ 6,600 $ 7,200 $ 8,000 $ 9,400 Required: 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, 2023 and 2024. Note: Round "Earnings per share" answers to 2 decimal places. 2024 Three Months Ended June Six Months Ended June 30 30 $ 38,000 10,500 5,200 $ 22,300 5,575 $ 16,725 2023 2024

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
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Volata Company began operations on January 1, 2023. In the second quarter of 2024, 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: Accounts Sales Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (25%) Net income Accounts Cost of goods sold (FIFO) 1st Quarter $ 30,000 6,000 4,000 $ 20,000 5,000 $ 15,000 Net income Earnings per share 2023 2024 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter $ 32,000 $ 34,000 $ 36,000 7,800 4,600 $ 21,600 5,400 9,000 5,000 $ 22,000 5,500 $ 16,200 $ 16,500 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: 2023 7,000 4,200 $ 20,800 5,200 $ 15,600 Sales for the second quarter of 2024 are $40,000, cost of goods sold under the FIFO method is $11,000, and operating expenses are $5,400. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. 2023 2024 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter $ 5,800 $ 6,600 $ 7,200 $ 8,000 $ 9,400 Required: 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, 2023 and 2024. Note: Round "Earnings per share" answers to 2 decimal places. 2024 Three Months Ended June Six Months Ended June 30 30 $ 38,000 10,500 5,200 $ 22,300 5,575 $ 16,725 2023 2024
Transcribed Image Text:Volata Company began operations on January 1, 2023. In the second quarter of 2024, 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: Accounts Sales Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (25%) Net income Accounts Cost of goods sold (FIFO) 1st Quarter $ 30,000 6,000 4,000 $ 20,000 5,000 $ 15,000 Net income Earnings per share 2023 2024 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter $ 32,000 $ 34,000 $ 36,000 7,800 4,600 $ 21,600 5,400 9,000 5,000 $ 22,000 5,500 $ 16,200 $ 16,500 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: 2023 7,000 4,200 $ 20,800 5,200 $ 15,600 Sales for the second quarter of 2024 are $40,000, cost of goods sold under the FIFO method is $11,000, and operating expenses are $5,400. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. 2023 2024 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter $ 5,800 $ 6,600 $ 7,200 $ 8,000 $ 9,400 Required: 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, 2023 and 2024. Note: Round "Earnings per share" answers to 2 decimal places. 2024 Three Months Ended June Six Months Ended June 30 30 $ 38,000 10,500 5,200 $ 22,300 5,575 $ 16,725 2023 2024
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