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Sizemore Company uses a perpetual Inventory system. In May (its 2nd quarter), It sold 2,000 units from its LIFO-base inventory, which had originally cost $35
Sizemore Company uses a perpetual Inventory system. In May (its 2nd quarter), It sold 2,000 units from its LIFO-base inventory, which had originally cost $35 per unit. The replacement cost is expected to be $40 per unit. The company is planning to reduce its inventory and only expects to replace 800 units by December 31, the end of its fiscal year A. Prepare all necessary joumal entries Sizemore Company would make in May related to Inventory. B. Using information from (a) and the following information, prepare an interim income statement for the second quarter for Sizemore Company. Also provide a separate calculation of your Tax Expense for quarter 2. Additional information for the second quarter of Sizemore Company's operations: Revenues in 2nd quarter Operating expenses in 2nd quarter $98,000 $3,000 Estimated annual repairs and property taxes benefiting all quarters and not included in the operating expenses for 2nd quarter $600 20% Effective annual income tax rate Income tax expense, 1st quarter Income before tax, 1st quarter $350 $1,000
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