The management of Crane Inc. asks your help in determining the comparative effects of the FIFO and LIFO inventory cost flow methods. For 2025, the accounting records show these data. They use the periodic inventory system.

Inventory, January 1 (11,500 units)

$ 40,250

Cost of 119,000 units purchased

464,300

Selling price of 95,000 units sold

727.000

Operating expenses

130.000

Units purchased consisted of 32,000 units at $3.70 on May 10.65,000 units at $3.90 on August 15, and 22,000 units at $4.20 on November 20. Income taxes are 30%.

(a) Prepare comparative condensed income statements for 2025 under FIFO and LIFO.

Crane Inc.

Condensed Income Statements

FIFO

LIFO

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