[The following information applies to the questions displayed below.]

Pacific Company sells electronic test equipment that it acquires from a foreign source. During the year 2014, the inventory records reflected the following:

Beginning Inventory (units,unit cost, total cost)

Purchases (units,unit cost, total cost)

Sales (47 units at $24,630 each) (units,unit cost, total cost)

Inventory is valued at cost using the LIFO inventory method.

Required:

1.

Complete the following income statement summary using the LIFO method and the periodic inventory system.

Pacific Company

Income Statement

For the Year Ended 2014

Sales Revenue:

Cost of goods sold:

Gross profit:

Expenses: 291,000

Pretax income:

Ending inventory:

2.

The management, for various reasons, is considering buying 22 additional units before December 31, 2014, at $9,540 each. Restate the income statement (and ending inventory), assuming that this purchase is made on December 31, 2014. Assume LIFO method and the periodic inventory system is used by the company.

Pacific Company

Income Statement

For the year ended 2014

Sales revenue:

Cost of goods sold:

Gross profit:

Expenses:

Pretax Income:

Ending Inventory:

3a.

How much did pretax income change because of the decision on December 31, 2014?

Pretax income ____________ by ____________

3b.	Assuming that the unit cost of test equipment is expected to continue to decline in 2015, is there any evidence of income manipulation? Yes or No