Courtney Company uses a periodic inventory system. Data for 2012: beginning merchandise inventory (December 31, 2011), 1,000
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1. Prepare income statements under the FIFO, LIFO, and weighted average costing methods. Use a format similar to the following:
2. Between FIFO and LIFO, which method is preferable in terms of (a) maximizing income from operations or (b) minimizing income taxes? Explain.
3. What would be your answer to requirement 2 if costs were falling? Explain.
Transcribed Image Text:
Inventory Costing Method Weighted Average Income Statement Sales Revenue Cost of Goods Sold* Gross Profit Units FIFO LIFO perating Expenses Income from Operations Income Tax Expense Net Income Cost of goods sold equation Beginning Inventory Purchases Goods Available for Sale Ending Inventory Cost of Goods Sold
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Related Book For
Fundamentals Of Financial Accounting
ISBN: 9780073527109
3rd Edition
Authors: Fred Phillips, Robert Libby, Patricia A Libby
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