Question
Flint Inc. is trying to determine whether to use the FIFO or average cost formula. The accounting records show the following selected inventory information: Purchases
Flint Inc. is trying to determine whether to use the FIFO or average cost formula. The accounting records show the following selected inventory information:
Purchases | Cost of Goods Sold | Ending Inventory | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Date | Units | Cost | Total | Units | Cost | Total | Units | Cost | Total | |||||||||||
Oct. | 2 | 8,700 | $ 12 | $ 104,400 |
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| 8,700 | $ 12 | $ 104,400 | ||||||||||
15 | 14,500 | 16 | 232,000 |
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|
| [1] | [2] | ||||||||||||
[3] | [4] | [5] | ||||||||||||||||||
29 |
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|
| 22,200 | ||||||||||||||||
[6] | [7] | |||||||||||||||||||
[8] | [9] | [10] | [11] | [12] | [13] |
The company accountant has prepared the following partial statement of income to help management understand the financial statement impact of each cost determination cost formula.
FIFO | Average | ||||
---|---|---|---|---|---|
Sales | $ 546,000 | $ 546,000 | |||
Cost of goods sold |
|
|
| ||
Gross profit |
|
| |||
Operating expenses | 214,000 | 214,000 | |||
Income before income tax |
|
| |||
Income tax expense ( 30%) |
|
| |||
Net income |
|
|
Fill in the missing information in the blanks shown in the partial statement of income above.
FIFO | Average | ||||
---|---|---|---|---|---|
Sales | $ 546,000 | $ 546,000 | |||
Cost of goods sold | enter a dollar amount | enter a dollar amount | |||
Gross profit | enter a total amount for the first part | enter a total amount for the first part | |||
Operating expenses | 214,000 | 214,000 | |||
Income before income tax | enter a total amount for the second part | enter a total amount for the second part | |||
Income tax expense ( 30%) | enter a dollar amount | enter a dollar amount | |||
Net income | $ enter a total amount | $ enter a total amount |
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