Question
At the end of the second quarter of 20X1, Malta Corporation assembled the following information: 1. The first quarter resulted in a $102,000 loss before
At the end of the second quarter of 20X1, Malta Corporation assembled the following information: |
1. | The first quarter resulted in a $102,000 loss before taxes. During the second quarter, sales were $1,212,000; purchases were $662,000; and operating expenses were $332,000. |
2. | Cost of goods sold is determined using the FIFO method. The inventory at the end of the first quarter was reduced by $16,000 to a lower-of-cost-or-market figure of $90,000. During the second quarter, replacement costs recovered, and by the end of the period, market value exceeded the ending inventory cost by $13,250. |
3. | The ending inventory is estimated using the gross profit method. The estimated gross profit rate is 46 percent. |
4. | At the end of the first quarter, the effective annual tax rate was estimated at 45 percent. At the end of the second quarter, expected annual income is $640,000. An investment tax credit of $15,000 and dividends received deduction of $82,500 are expected for the year. The combined state and federal tax rate is 40 percent. |
5. | The tax benefits from operating losses are assured beyond a reasonable doubt. Prior-years income totaling $50,000 is available for operating loss carrybacks. |
I am trying to create an income statement from the above information, but I can't figure out Ending Inventory so I can get COGS
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