The board of directors of Soho Corporation is considering whether or not it should instruct the accounting department to shift from a first-in, first-out (FIFO) basis of pricing inventories to a last-in, first-out (LIFO) basis. The following information is available.

Sales ..............10,500 units @ $45

Inventory, January 1 .......3,000 units @ $15

Purchases ..........3,000 units @ $17

5,000 units @ $20

3,500 units @ $25

Inventory, December 31 ....4,000 units @ ?

Operating expenses ......$100,000

Instructions

Prepare a condensed income statement for the year on both bases for comparative purposes.