E7-10 (Algo) Evaluating the Effects of Inventory Methods on Income from Operations, Income Taxes, and Net Income (Periodic) [LO 7-3]

Courtney Company uses a periodic inventory system. The following data were available: beginning inventory. 1.400 units at $40, purchases, 3,600 units at $45; operating expenses (excluding income taxes), $93.500 ending Inventory per physical count at December 31, 950 units, sales price per unit, $80, and average income tax rate, 30%

Required:

1. Complete the income statements and the cost of goods sold calculation under the FIFO, LIFO, and weighted average costing

methods.

2-a. Between FIFO and LIFO, which method is preferable in terms of maximizing income from operations, if costs are rising?

2-b. Between FIFO and LIFO, which method is preferable in terms of minimizing income taxes, if costs are rising?

3-a. Between FIFO and LIFO, which method is preferable in terms of maximizing income from operations, if costs are falling?

3-b. Between FIFO and LIFO, which method is preferable in terms of minimizing income taxes, if costs are falling?

Reg 1 LUETT Req 2A Req 2B Req 3A Req 3B Complete the income statements and the cost of goods sold calculation under the FIFO, LIFO, and weig methods. (Do not round intermediate calculations. Round your final answers to the nearest dollar amou Income Statement Units Inventory Costing Method FIFO LIFO Weighted Average Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense Net Income "Cost of Goods Sold Equation Beginning Inventory Purchases Goods Available for Sale Ending Inventory Cost of Goods Sold