Complete the problem using Excel formulas

B C D E F G H K M N P-31: Inflation and inventory accounting effect (LO5) The Canton Corporation shows the following income statement (below). The firm uses FIFO inventory accounting. a) Assume in 20X2 that the same 17,600-unit volume is maintained, but that the sales price increases by 10 percent. Because of FIFO inventory policy, old inventory will still be charged off at $7 per unit. Also assume selling and administrative expense will be 5 percent of sales and depreciation will be unchanged. The tax rate is 30 percent. Compute aftertax income for 20X2. b) In part a, by what percent did aftertax income increase as a result of a 10 percent increase in the sales price? Explain why this impact took place. c) Now assume that in 20X3 the volume remains constant at 17,600 units, but the sales price decreases by 15 percent from its year 20X2 level. Also, because of FIFO inventory policy, cost of goods sold reflects the inflationary conditions of the prior year and is $7.50 per unit. Further, assume selling and administrative expense will be 5 percent of sales and depreciation will be unchanged. The tax rate is 30 percent. Compute the aftertax income. Given: 20X1 20X2 20X3 On Own ...Sort of! Units Sold: 17600 17600 17600 NOTE: All Shaded Cells Must Contain Forumlas! Revenue/Unit % Change: 0.1 -0.15 Revenue/Unit: 15.5 6 COGS - FIFO Inventory Cost/Unit: 7 7 7.5 Selling & Administrative % of Sales: 0.05 0.05 0.05 Tax Rate: 0.3 0.3 0.3 100 10 20X1 20X2 20X3 Sales 12 Cost of Good Sold 13 Gross Profit 14 Selling & Administrative 15 Depreciation 15,900 15,900 15,900 20X2 7 % A Income > 1 % A Price Explanation 16 Operating Profit 17 Taxes (30%) 18 a) & C ) Aftertax Income 20 b ) Income % Change 21 22 23 24