Volata Company began operations on January 1, 2023. In the second quarter of 2024, it adopted...

 

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Volata Company began operations on January 1, 2023. In the second quarter of 2024, it adopted the FIFO method of inventory valuation. In the past, it used the LIFO method. The company's interim income statements as originally reported under the LIFO method follow: 2023 Sales Accounts Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (25%) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter $ 33,000 6,300 4,300 $ 22,400 2024 $ 41,000 10,800 5,500 $ 24,700 6,100 6,175 $ 35,000 $ 37,000 $ 39,000 7,300 4,500 $ 23,200 8,100 9,300 4,900 $ 24,000 5,800, 6,000 $ 16,800 $ 17,400 $ 18,000 5,600 Net income 5,300 $ 24,400 $ 18,300 $ 18,525 If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows: 2023 2024 Accounts Cost of goods sold (FIFO) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter1st Quarter $ 6,100 $ 6,900 $ 7,500 $ 8,300 $ 9,700 Sales for the second quarter of 2024 are $43,000, cost of goods sold under the FIFO method is $11,300, and operating expenses are $5,700. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. Required: Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2023 and 2024. Note: Round "Earnings per share" answers to 2 decimal places. Volata Company began operations on January 1, 2023. In the second quarter of 2024, it adopted the FIFO method of inventory valuation. In the past, it used the LIFO method. The company's interim income statements as originally reported under the LIFO method follow: 2023 Sales Accounts Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (25%) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter $ 33,000 6,300 4,300 $ 22,400 2024 $ 41,000 10,800 5,500 $ 24,700 6,100 6,175 $ 35,000 $ 37,000 $ 39,000 7,300 4,500 $ 23,200 8,100 9,300 4,900 $ 24,000 5,800, 6,000 $ 16,800 $ 17,400 $ 18,000 5,600 Net income 5,300 $ 24,400 $ 18,300 $ 18,525 If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows: 2023 2024 Accounts Cost of goods sold (FIFO) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter1st Quarter $ 6,100 $ 6,900 $ 7,500 $ 8,300 $ 9,700 Sales for the second quarter of 2024 are $43,000, cost of goods sold under the FIFO method is $11,300, and operating expenses are $5,700. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. Required: Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2023 and 2024. Note: Round "Earnings per share" answers to 2 decimal places.

Answer rating: 100% (QA)

To calculate the net income and earnings per share EPS for Volata Company for the threemonth and sixmonth periods ended June 30 2023 and 2024 we need ... View the full answer