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P$7-4($Algo$)$ Analyzing and Interpreting Income Manipulation Under the LIFO Inventory Method LO$7-2,7-3$

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Pacific Company sells electronic test equipment that it acquires from a foreign source. During the year, the inventory records reflected the following:

Units Unit Cost Total Cost

Beginning inventory $23$ $ $11,510$ $ $264,730$

Purchases $4210,010420,420$

Sales $(51$ units at $$24,590$ each$)$

Inventory is valued at cost using the LIFO inventory method.

P$7-4$ Part $2$

$2.$ The management, for various reasons, is considering buying $23$ additional units before December $31$ year$-$end at $$9,510$ each. Restate the income statement $($and ending inventory$),$ assuming that this purchase is made on December $31.$ Assume the LIFO method and the periodic inventory system are used by the company. PACIFIC COMPANY

Income Statement

For the Current Year Ended

Sales revenue

Cost of goods sold

Gross profit

Expenses $300,000$

Pretax income

Ending inventory