The following comparative information is available for Keysor Company for 2014.

Instructions
(a) Determine net income under each approach. Assume a 30% tax rate.
(b) Determine net cash provided by operating activities under each approach. Assume that all sales were on a cash basis and that income taxes and operating expenses, other than depreciation, were on a cash basis.
(c) Calculate the quality of earnings ratio under each approach and explain yourfindings.

Transcribed Image Text:

FIFO $86,000 $86,000 29,000 LIFO Sales revenue Cost of goods sold Operating expenses 38,000 (including depreciation) Depreciation Cash paid for inventory purchases 27,000 10,000 32,000 27,000 10,000 32,000