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6. [The following information applies to the questions displayed below.] Income is to be evaluated under four different situations as follows: a. Prices are rising:
6.
[The following information applies to the questions displayed below.]
Income is to be evaluated under four different situations as follows:
a. Prices are rising:
(1) Situation A: FIFO is used.
(2) Situation B: LIFO is used.
b. Prices are falling:
(1) Situation C: FIFO is used.
(2) Situation D: LIFO is used.
The basic data common to all four situations are: sales, 509 units for $19,851; beginning inventory, 280 units; purchases, 382 units; ending inventory, 153 units; and operating expenses, $3,500. The income tax rate is 30%.
6. Required information Required 1. Complete the following tabulation for each situation in Situations A and B (prices rising), assume the following: beginning inventory, 280 units at $8 $2.240: purchases, 382 units at $9 $3,438. In Situations C and D (prices falling), assume the opposite, that is, beginning inventory, 280 units at 9-$2,520: purchases, 382 unifts at $8- $3,056.Use periodic inventory procedures.(Round your answers to nearest dollan amount.) PRICES RISING PRICES F Situation A Situation B Situation C SituationD FIFO LIFO FIFO 19,851 $ 19,851 19,851 Sales revenue Cost of goods sold: Beginning inventory 2,240 3,438 5,678 1,377 4,301 15,550 3,500 12,050 3,615 8,435 Goods available for sale Ending inventory Cost of goods sold Gross profit 3,500 3,500 Pretax income Income tax expense Net incomeStep by Step Solution
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