Question

Check my work 8 2016 2017 1stQ 1stQ 34,000 2ndQ $ 36,000 3rdQ $38,000 4th0 40,000 Sales $ 42,000 Cost of goods sold (LIFO) 7,400 8,200 9,400 ,900 $ 24,000 $ 24,800 $23,200 $25,200 $ 25,500 Income before income taxes 10 Income taxes (408) 9,280 9,600 9,920 10,080 10,200 points $ 14,880 Net income $13,920 $14,400 15,120 15,300 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: еВook 2016 2017 Print Cost of goods sold (FIFO) 6.200 7,000 S7.600 Sa.400 $9.800 References Sales for the second quarter of 2017 are $44,000, cost $5,800. The effective tax rate remains 40 percent. Cambi Company has 1,000 shares of common stock outstanding. f goods sold under the FIFO method is $11,400, and operating expenses are 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.) Six Months Ended June 30 Three Months Ended June 30 2016 2017 2016 2017 Net income 15,960 16,080 Net income per common share 15.96 16.08

Answer 1

Solution :

Particulars Sales Less: COGS (FIFO) Less: Operating Expenses Income before Income taxes Less: Income Taxes (40%) Net Income No. of Shares Net Income per share Three months ended June 30 2016 2017 36,000 44,000 7,000 11,400 4,600 5,800 24,400 26.800 9,760 10,720 14,640 16,080 1000 1,000 14.64 16.08 Six months ended June 30 2016 2017 70,000 86,000 13,200 21,200 9,000 11,400 47,800 53,400 19, 120 21,360 28,680 32,040 1,000 1,000 28.68 32.04

Working Note:

Particulars Sales Less: COGS (FIFO) Less: Operating Expenses Income before Income taxes Less: Income Taxes(40%) Net Income 2016 2017 1st Quarter2nd Quarter 1st Quarter2nd Quarter 34,000 36,000 42.000 44,000 6.200 7.000 9.800 11.400 4,400 4,600 5,600 5,800 23,400 24,400 26,600 26,800 9,360 9,760 10,640 10,720 14,040 14,640 15,960 16,080