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: Sales Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (40%) Net income lsto $ 32,000 6,200 4,200 $ 21,600 8,640 $ 12,960 2016 2 ndo 3rdo 4tho $ 34,000 $ 36,000 $ 38,000 7,200 8,000 9,200 4,400 4,800 5,200 $ 22,400 $ 23,200 $ 23,600 8,960 9, 2809 ,440 $ 13,440 $ 13,920 $ 14,160 2017 lsto $ 40,000 10,700 5,400 $ 23,900 9,560 $ 14,340 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: 2016 2nd 3rd $6,800 $ 7,400 1st $6,000 lsto 2017 Isto $9,600 4th $8,200 Cost of goods sold (FIFO) Sales for the second quarter of 2017 are $42,000, cost of goods sold under the FIFO method is $11,200, and operating expenses are $5,600. 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.) Three Months Ended June 30 2016 2017 Six Months Ended June 30 2016 2017 Net income Net income per common share

Answer 1

Schedule Showing Net Income and Earning per share
	Three Month Ended for June30		Six Month Ended for June 30, 2017
	2016	2017	2016	2017
Net Income	$13680	$15,120	$26,760	30,120
Earning Per share	$13.68	$15.12	$26.76	30.12

	2016				2017
	1st Qtr	2nd Qtr			1st Qtr	2nd Qtr	Six Month
Sales	$32,000	$34,000	$66,000		$40,000	$42,000	$82,000
Less: Cost of Goods Sold	$6000	$6800	$12800		$9600	$11200	$20,800
Less: Operating expense	$4,200	$4,400	$8600		$5,400	$5,600	$11,000
Income Before Income Tax	$21,800	$22,800	$44,600		$25,000	$25,200	$50,200
Less: Income Tax(40%)	$8720	$9120	$17840		$10000	$10080	$20080
Net Income	$13080	$13680	$26760		$15000	$15120	$30120
No. of Outstanding Share	1000	1000	1000		1000	1000	1000
Earning Per share	$13.08	$13.68	$26.76		$15	$15.12	$30.12