E7-7 (Algo) Analyzing and Interpreting the Financial Statement Effects of LIFO and FIFO LO7-2, 7-3

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Emily 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				2,830			$	14
For the current year:
Purchase, April 11				8,870				15
Purchase, June 1				7,870				20
Sales ($57 each)				10,920
Operating expenses (excluding income tax expense)	$	185,500

E7-7 Part 1

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.