Question 6

The management of Vaughn Manufacturing asks your help in determining the comparative effects of the FIFO and LIFO inventory cost flow methods. For 2017, the accounting records show these data. $38,591 Inventory, January 1 (10,430 units) Cost of 118,590 units purchased 487,022 Selling price of 92,870 units sold 762,300 Operating expenses 123,740 Units purchased consisted of 35,000 units at $3.90 on May 10; 57,580 units at $4.10 on August 15; and 26,010 units at $4.40 on November 20. Income taxes are 28%. (a) Prepare comparative condensed income statements for 2017 under FIFO and LIFO. (Round answers to 0 decimal places, e.g. 5,125.) Vaughn Manufacturing Condensed Income Statements FIFO LIFO $ $ $