3 Complete the condensed Income Statement below (round to a whole number) Valle Inc Income Statement For the Year Ended December 31, 2014 FIFO LIFO Average Cost Sales $ Less Sales returns and allowances Sales discounts Net sales Cost of goods sold Gross profit Operating expenses Selling expenses Administrative expenses Total operating expenses Income from operations before income taxes Income taxes (21 ) Net income $ Valle Inc Retained Earnings Statement For the Year Ended December 31, 2014 FIFO LIFO Average Cost Retained Earnings, January 1, 2014 $ 71,893 $ 71,893 $ 71,893 Net income Less Dividends 3,000 3,000 3,000 Increase in retained earnings Retained Earnings, December 31, 2014 Valle Inc Balance Sheet December 31, 2014 FIFO LIFO Average Cost Current Assets Cash 36,013 36,013 36,013 Accounts Receivable 13,600 13,600 13,600 Merchandise Inventory Total Current Assets Plant Assets Equipment 165,000 165,000 165,000 Less Accumuluated Depreciation 99,000 99,000 99,000 Total plant assets 66,000 66,000 66,000 Total Assets Current Liabilities Accounts Payable 17,800 17,800 17,800 Taxes Payable Total current liabilities Common Stock 50,000 50,000 50,000 Retained Earnings Total Stockholders' Equity Total liabilities and stockholders' equity FIFO LIFO Average Cost check 0 0 0 4 Answer the following questions FIFO LIFO Average Cost a Calculate the gross profit percentage (round to one decimal place) b In this example, which of the three inventory costing methods results in the highest total assets Why In this example, which of the three inventory costing methods results in the highest owner's equity Why c Would your answer to b c above change if the units prices had decreased with each purchase Why d Where did the 10,000 units in beginning inventory come from e In each method the dollar amount of ending inventory the dollar amount of cost of goods sold will always equal what

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Question: 3. Complete the condensed Income Statement below (round to a whole number) Valle Inc. Income Statement For the Year Ended December 31, 2014 FIFO LIFO

3. Complete the condensed Income Statement below (round to a whole

number) Valle Inc. Income Statement For the Year Ended December 31, 2014

FIFO LIFO Average Cost Sales $ Less: Sales returns and allowances Sales

discounts Net sales Cost of goods sold Gross profit Operating expenses: Selling

expenses Administrative expenses Total operating expenses Income from operations - before income

Complete the condensed Income Statement below (round to a whole number)

Valle Inc.

Income Statement

For the Year Ended December 31, 2014

FIFO

LIFO

Average Cost

Sales

Less:

Sales returns and allowances

Sales discounts

Net sales

Cost of goods sold

Gross profit

Operating expenses:

Selling expenses

Administrative expenses

Total operating expenses

Income from operations - before income taxes

Income taxes (21%)

Net income

Valle Inc.

Retained Earnings Statement

For the Year Ended December 31, 2014

FIFO

LIFO

Average Cost

Retained Earnings, January 1, 2014

71,893

Net income

Less: Dividends

3,000

Increase in retained earnings

Retained Earnings, December 31, 2014

Valle Inc.

Balance Sheet

December 31, 2014

FIFO

LIFO

Average Cost

Current Assets:

Cash

36,013

Accounts Receivable

13,600

Merchandise Inventory

Total Current Assets

Plant Assets:

Equipment

165,000

Less: Accumuluated Depreciation

99,000

Total plant assets

66,000

Total Assets

Current Liabilities:

Accounts Payable

17,800

Taxes Payable

Total current liabilities

Common Stock

50,000

Retained Earnings

Total Stockholders' Equity

Total liabilities and stockholders' equity

FIFO

LIFO

Average Cost

check

Answer the following questions:

FIFO

LIFO

Average Cost

Calculate the gross profit percentage:

(round to one decimal place)

In this example, which of the three inventory costing methods results in the highest total assets? Why?

In this example, which of the three inventory costing methods results in the highest owner's equity? Why?

Would your answer to b. & c. above change if the units prices had decreased with each purchase? Why?

Where did the 10,000 units in beginning inventory come from?

In each method the dollar amount of ending inventory + the dollar amount of cost of goods sold

will always equal what?

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