Borgia Enterprises has the following statement of earnings data available for 2018: Sales revenue $737,200 Operating expenses
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Question:
Borgia Enterprises has the following statement of earnings data available for 2018:
Sales revenue | $737,200 |
Operating expenses | 243,700 |
Interest expense | 39,500 |
Income tax rate | 34% |
Borgia uses a perpetual inventory accounting system and the weighted average cost method. Borgia is considering adopting the FIFO method for costing inventory. Borgia's accountant prepared the following data:
If Weighted Average Cost Used | If FIFO Used | |||
Ending inventory | $ 61,850 | $ 80,200 | ||
Cost of goods sold | 403,150 | 384,800 |
Required:
1. Compute income before taxes, income tax expense, and net income for both of the inventory costing methods (rounded to the nearest dollar).
Weighted Average Cost | FIFO | |
Income before taxes | $ | $ |
Income tax expense / Tax savings due to loss | $ | $ |
Net income | $ | $ |
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