P7-4 (Algo) Analyzing and Interpreting Income Manipulation Under the LIFO Inventory Method LO7-2, 7-3

Pacific Company sells electronic test equipment that it acquires from a foreign source. During the year, the inventory records reflected the following:

	Units	Unit Cost	Total Cost
Beginning inventory	21	11,560	242,760
Purchases	43	10,060	432,580
Sales (49 units at $24,670 each)

Inventory is valued at cost using the LIFO inventory method.

2. The management, for various reasons, is considering buying 21 additional units before December 31 year-end at $9,560 each. Restate the income statement (and ending inventory), assuming that this purchase is made on December 31. Assume the LIFO method and the periodic inventory system are used by the company.

Pacific Company

Income statement

For the current year ended

Sales Revenue	1,208,830
Costs of Goods Sold	??
Gross Profit	??
Expenses	298,000
Pretax Income	??
Ending Inventory	??