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Pina Inc. is trying to determine whether to use the FIFO or average cost formula. The accounting records show the following selected inventory information Cost
Pina Inc. is trying to determine whether to use the FIFO or average cost formula. The accounting records show the following selected inventory information Cost of Goods Sold Purchases Ending Inventory Units Cost Total Units Cost Total 8,100 $11 $89,100 Date Units Cost Total Oct. 2 8,100 $11 $89,100 15 13,500 15 202,500 29 20,600 17 8 [9 [10] [11 12] 13 [14) [15] The company accountant has prepared the following partial income statement to help management understand the financial statement impact of each cost determination cost formula. FIFO Average Sales Cost of goods sold Gross profit Operating expenses Income before income tax Income tax expense (30%) Net income $563,000 $563,000 182,000 182,000
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