a) prepare a schedule that illustrates and compares the following data for Riverdale Company under the LIFO and FIFO inventory methods for 20x1-20x3. Assume the company would begin FIFO at the beginning of 20x1. 1) Year-end inventory balances, at cost. 2) Annual net income after taxes. 3) Earnings per share. 4) Cash balance at year end. Assume all sales are collected in the year of sale and all purchases, operating expenses, and taxes are paid during the year incurred.

ACCOUNTING 2101/6101,-. TESTNGYOURKNOwLEDGE CHAPTER 8 1) Riverd Page 1 ale Company is considering changing its inventory valuation from LIFO to FIFO anagement of the company wants to consider all of the effects on the company, including its reported performance, before making the final decision. As of January 1, 20x1, the inventory account is valued on the LIFO basis, consisting of 1,000,000 units at $7.50 per unit. Also, as of 1/1/x1, the cash balance is $900,000 and there are 1,000,000 shares of common stock outstanding. The company has made the following forecasts for the period 20x1 through 20x3. 20x1 20x2 20x3 1.3 Unit sales (in millions of units) Sales price per unit Unit purchases (in millions of units) Purchase price per unit Annual depreciation (in thousands of dollars) Cash dividends paid per share Cash payments for additions to and replacement of $12 1.0 $9.5 $340 $0.35 1.2 $15 1.1 10.5 360 0.35 1.2 $11 380 $0.35 plant and equipment (in thousands of dollars) Income tax rate Operating expenses (exclusive of depreciation) $420 38% $420 38% $420 38% as a percent of sales Common shares outstanding (in millions) 12% 13% 13% are a schedule that illustrates and compares the following data for Riverdale Company Prepart e UFO and FiFO inventory methods for 20x1-20x3. begin FIFO at the beginning of 20x1. 1) Year-end inventory balances, at cost. a) Assume the company would Prepare the schedule using EXCEL.) ) Annual net income after taxes. 3) Earnings per share. 4) Cash es are collected in the year of sale and all purchases, operating expenses, and e all sales Assunace paid during the year incurred taxes arep e, your answer to (a), and any additional issues you believe need to be e data e the i. prepare a report that recommends whether or not Riverdale Company should bl consdetothe FiFO method. Support your conclusions with appropriate arguments chang ENTER NM SHIFT ALT CTRL