Question

Ux Bookmarks Dribbble N myNortheastern Blackboard >> Other Bookmark ck my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question Required information The following information applies to the questions displayed below.) 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: $11 Inventory. December 31, prior year For the current years Purchase, April 11 Purchase, June 1 Sales (958 each) Operating expenses (excluding income tax expense) Units 2.990 8.800 7.820 10,950 14 - $188.000 Required: 1. Prepare a separate income statement through pretax income that details cost of goods sold for ( Case A: FIFO and (b) Case B:LIFO. Answer is complete but not entirely correct. BROADHEAD COMPANY Income Statement For the Year Ended December 31, current year Case A Case B FIFO LIFO S 635,100 $ 635.100 Sales revenue Cost of goods sold Beginning inventory Purchases $ $ 32,890 188,680 32,890 188,680 Goods available for sale Ending inventory 221,570 129,100 221,570 95,980 - 1 Cost of goods sold Gross profit Operating expenses 92. 470 542,630 188.000 25,590 509,510 188.000 Pretax income $ 354,630 $ 321,510

Answer 1

Q1
	Case A		Case B
Sales		$ 635,100		$ 635,100
Cost of goods sold
beginning inventory	$   32,890		$   32,890
Purchases	$ 188,680		$ 188,680
goods available for sale	$ 221,570		$ 221,570
ending inventory	$ 117,040		$   83,920
cost of goods sold		$ 104,530		$ 137,650
		$ 530,570		$ 497,450
Operating expenses		$ 188,000		$ 188,000
Pre tax income		$ 342,570		$ 309,450
Ques 2
	Case A	Case B
	FIFO	LIFO	Difference
Pre tax income	$ 342,570	$ 309,450	$   33,120
ending inventory	$ 117,040	$   83,920	$   33,120

WORKING

	Units	cost	total cost
beg inv	2990	$                     11	$   32,890
Purchase apr 11	8800	$                       9	$   79,200
purchase june 1	7820	$                     14	$ 109,480
goods available for sale	19610		221570
	Case A	Case B
	FIFO	LIFO
goods available for sale	19610	19610
Units sold	10950	10950
Ending Inventory	8660	8660
Cost of goods sold
From
(2990*11)	$             32,890
(7960*9)	$             71,640
	$           104,530
(7820*14)		$           109,480
(3130*9)		$             28,170
		$           137,650
Ending Inventory	$           117,040	$             83,920
	221570-104530	221570-137650