Broadhead Company uses a periodic inventory system. At the end of the annual accounting period, December...
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Broadhead Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2: Inventory, December 31, prior year For the current year: Purchase, April 11 Purchase, June 1 Sales (558 each) Operating expenses (excluding income tax expense) Sales revenue Cost of goods sold: Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Gross profit Operating expenses Required: 1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B:LIFO. Pretax income Answer is complete but not entirely correct. BROADHEAD COMPANY Income Statement For the Year Ended December 31, current year Case A FIFO Q 00 O 00 ● 3 $ 32,890 188,680 221,570 129,100 s 635,100 92,470 542,630 188.000 $ 354,630 S Case B LIFO $180,000 32,890 188,680 221,570 95,980 S 635,100 125,590 509,510 188,000 Units $ 321,510 2,990 8,800 7,820 10,950 Unit Cost $11 24 Broadhead Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2: Inventory, December 31, prior year For the current year: Purchase, April 11 Purchase, June 1 Sales ($58 each). Operating expenses (excluding income tax expense) Pretax income Ending inventory Comparison of Amounts Case B LIFO Case A FIFO $188,000 Difference Units 2. Compute the difference between the pretax income and the ending inventory amount for the two cases. 2,990 8,800 7,820 10,950 Unit Cost $11 9 Broadhead Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2: Inventory, December 31, prior year For the current year: Purchase, April 11 Purchase, June 1 Sales (558 each) Operating expenses (excluding income tax expense) Sales revenue Cost of goods sold: Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Gross profit Operating expenses Required: 1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B:LIFO. Pretax income Answer is complete but not entirely correct. BROADHEAD COMPANY Income Statement For the Year Ended December 31, current year Case A FIFO Q 00 O 00 ● 3 $ 32,890 188,680 221,570 129,100 s 635,100 92,470 542,630 188.000 $ 354,630 S Case B LIFO $180,000 32,890 188,680 221,570 95,980 S 635,100 125,590 509,510 188,000 Units $ 321,510 2,990 8,800 7,820 10,950 Unit Cost $11 24 Broadhead Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2: Inventory, December 31, prior year For the current year: Purchase, April 11 Purchase, June 1 Sales ($58 each). Operating expenses (excluding income tax expense) Pretax income Ending inventory Comparison of Amounts Case B LIFO Case A FIFO $188,000 Difference Units 2. Compute the difference between the pretax income and the ending inventory amount for the two cases. 2,990 8,800 7,820 10,950 Unit Cost $11 9
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1 Calculation of Pretax Income Broadhead Company Income Statement For the year ended December 31 cur... View the full answer
Related Book For
Financial Accounting
ISBN: 978-0078025556
8th edition
Authors: Robert Libby, Patricia Libby, Daniel Short
Posted Date:
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