Volata Company began operations on January 1, 2019. In the second quarter of 2020, 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:

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:

Sales for the second quarter of 2020 are $20,000, cost of goods sold under the FIFO method is $9,000, and operating expenses are $3,400. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding.

Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2020.

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2019 2020 1stQ 2ndQ 3rdQ 4thQ 1stQ Sales $10,000 $12,000 $14,000 $16,000 $18,000 Cost of goods sold (LIFO). Operating expenses.. 4,000 5,000 5,800 7,000 8,500 2,000 2,200 2,600 3,000 3,200 Income before income $ 4,000 1,000 $ 4,800 1,200 $ 5,600 1,400 $ 6,000 1,500 taxes $ 6,300 Income taxes (25%). 1,575 Net income. $ 3,000 $ 3,600 $ 4,200 $ 4,500 $ 4,725