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Waterway Company is considering changing its inventory valuation method from FIFO to LIFO because of the potential tax savings. However, management wishes to consider all

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Waterway Company is considering changing its inventory valuation method from FIFO to LIFO because of the potential tax savings. However, management wishes to consider all of the effects on the company, including its reported performance, before making the final decision The inventory account, currently valued on the FIFO basis consists of 1,000,000 units at $8 per unit on January 1, 2020. There are 1,000,000 shares of common stock outstanding as of January 1, 2020, and the cash balance is $400,000. The company has made the following forecasts for the period 2020-2022. 2022 3.2 $12 2020 3.0 $10 29 $8 $300 $0.15 2021 2.9 $12 3.0 $9 $300 $0.15 3.1 $10 $300 $0.15 Unit sales (in millions of units) Sales price per unit Unit purchases (in millions of units) Purchase price per unit Annual depreciation (in thousands of dollars) Cash dividends per share Cash payments for additions to and replacement of plant and equipment in thousands of dollars) Income tax rate Operating expenses (exclusive of depreciation) as a percent of sales Common shares outstanding in millions) $350 $350 40% $350 40% 40% 15% 1 15% 1 15% 1 la) Compute the following data for Waterway Company under the FIFO and the LIFO inventory method for 2020-2022. Assume the company would begin LIFO at the beginning of 2020 [Enter amounts in thousands, Round earnings per share values to 2 decimal places, s. 52.75. Round other answers to o decimal places, es, 125) (a) Compute the following data for Waterway Company under the FIFO and the LIFO inventory method for 2020-2022. Assume the company would begin LIFO at the beginning of 2020. (Enter amounts in thousands. Round earnings per share values to 2 decimal places, eg. 52.75. Round other answers to 0 decimal places, e.g. 125.) Assume all sales are collected in the year of sale and all purchases operating expenses, and taxes are paid during the year incurred, Year-end inventory balances 2022 2020 2021 FIFO $ $ LIFO $ $ Annual net income after taxes 2020 2021 2022 $ $ FIFO LIFO $ $ Earnings per share 2020 2021 2022 FIFO $ LIFO $ $ $ Cash balance 2020 2021 2022 FIFO 'S 5 LIFO $ $ $

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