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

[The following information applies to the questions displayed below.]

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

2,810

$

11

For the current year:

Purchase, April 11

8,970

9

Purchase, June 1

7,920

14

Sales ($56 each)

10,890

Operating expenses (excluding income tax expense)

$

193,000

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.

BROADHEAD COMPANY
Income Statement
For the Year Ended December 31, current year
	Case A		Case B
	FIFO		LIFO
Cost of goods sold:
Goods available for sale	0		0
Cost of goods sold