Question

Cambi Company began operations on January 1, 2016. In the second quarter of 2017, 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 2 3rd $ 24,000 $22.000 6,000 Isto $ 20,000 5,eee 3,eee $ 12,000 Sales Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (40%) Net Income 4th $26.000 8,eee 4,000 $14,000 28.000 9.500 $12,00 3,660 $ 13,600 5.440 $ 8,160 $14,300 5,220 8.50 $ 7,200 $ 7.6.80 $ ,400 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: foods sold (FIFO) isto $ 4,800 2nd $5,500 3rd 56,200 4th $7,000 $8,400 Sales for the second quarter of 2017 are $30,000, cost of goods sold under the FIFO method is $10,000, and operating expenses are $4,400. The effective tax rate remains 40 percent. Cambi Company has 1.000 shares of common stock outstanding Prepare a schedule showing the calculation of net income and earnings per share that Cambi reports for the three month period and the six-month period ended June 30, 2017 (Round "Earnings per share" answers to 2 decimal places.) Answer is not complete. Three Months Six Months Ended June 30 Ended June 30 2016 2017 2016 2017 $ 4,400 $ 9,360 Net income Net Income per common share $ 936

Answer 1

Three months ended June 30
	2016	2017
Sales	22000	30000
Less: COGS	5600	10000
Operating expenses	3200	4400
Income before tax	13200	15600
Less: Tax @40%	5280	6240
Net income	7920	9360
Net income per share	7.92	9.36

Six months ended June 30
	2016	2017
Sales	42000	58000
Less: COGS	10400	19500
Operating expenses	6200	8600
Income before tax	25400	29900
Less: Tax @40%	10160	11960
Net income	15240	17940
Net income per share	15.24	17.94