Answer:
Gresa Inc.
Comparative Condensed Income Statements for 2017
under FIFO and LIFO.
FIFO LIFO
Sales 1176450 1176450
Cost Of Goods Sold 660,400 657, 200
Gross Profit 516050 539,500
Operating Expense $ 150,000 $ 150,000
Income before Tax $ 366,050 $ 389500
Income Tax (30%) $ 109815 $ 116850
Net Income $ 256235 $272650
Working :
Fifo Cost of Goods Sold= $ 10,000 + $168,000 + $ 150,000+ 156,000 + 176,400=
Lifo Cost of Goods Sold= $ 224,000 + 156,000+ $ 150,000+127,200
Purchases were made quarterly as follows.
Quarter Units Unit Cost Total Cost
1 70,000 $2.40 $168,000
2 60,000 2.50 150,000
3 60,000 2.60 156,000
4 80,000 2.80 224,000
270,000 $698,000
Inventories Beginning (5,000 units) $10,000
Total net sales (253,000 units) $1,176,450
Ending (22,000 units)
Total cost of goods purchased (270,000 units) 698,000
FIFO and LIFO accounting are inventory management and financial accounting procedures that involve the amount of money a corporation must have locked up in the inventory of manufactured items, raw materials, parts, components, or feedstocks.
Comparative Condensed Income Statements for 2017 under FIFO and LIFO is as follow:
For more information about FIFO and LIFO refer to the link:
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