Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company used the FIFO inventory costing method, but it failed to apply LCM
Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company used the FIFO inventory costing method, but it failed to apply LCM to the ending inventory. The preliminary income statement follows Sales Revenue Cost of Goods Sold $142,000 Beginning Inventory Purchases $ 15,500 92,000 Goods Available for Sale Ending Inventory (FIFO cost) 107,500 23,245 Cost of Goods Sold 84,255 Gross Profit Operating Expenses 57,745 31,500 26,245 10,498 Income from Operations Income Tax Expense (40%) Net Income $ 15,747 Assume that you have been asked to restate the financial statements to incorporate LCM. You have developed the following data relating to the ending inventory Market Value Purchase Cost Item Quantity Per Unit Total per Unit 1,550 700 3,600 1,550 $4.10 $3.10$ 4,805 2,975 7,560 7,905 4.25 2.10 5.10 2.10 1.05 3.10 ? $23,245
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started