Brief Exercise 4-6

During 2017, Blue Company changed from FIFO to weighted-average inventory pricing. Pretax income in 2016 and 2015 (Blues first year of operations) under FIFO was $174,240 and $197,690, respectively. Pretax income using weighted-average pricing in the prior years would have been $147,300 in 2016 and $190,400 in 2015. In 2017, Blue reported pretax income (using weighted-average pricing) of $206,300. Show comparative income statements for Blue, beginning with Income before income tax, as presented on the 2017 income statement. (The tax rate in all years is 28%.)

201 201 015 Income before income tax Income tax Net Income