Question
Broadhead Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided
Broadhead Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2:
Units | Unit Cost | ||||||||
Inventory, December 31, prior year | 2,840 | $ | 13 | ||||||
For the current year: | |||||||||
Purchase, April 11 | 9,000 | 11 | |||||||
Purchase, June 1 | 7,830 | 16 | |||||||
Sales ($52 each) | 10,820 | ||||||||
Operating expenses (excluding income tax expense) | $ | 188,000 | |||||||
|
3.
value: 1.00 points
Required information
Required:
1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO.
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4.
value: 1.00 points
Required information
2. Compute the difference between the pretax income and the ending inventory amount for the two cases.
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