Required information (The following information applies to the questions displayed below.) Emily Company uses a...
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Required information (The following information applies to the questions displayed below.) Emily Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2: Units 2,950 Unit Cost $ 10 Inventory, December 31, prior year For the current year: Purchase, April 11 Purchase, June 1 Sales ($56 each) Operating expenses (excluding income tax expense) 8,960 7,930 10,880 11 16 $191,000 Required: 1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO. EMILY COMPANY Income Statement For the Year Ended December 31, current year Case A FIFO Case B LIFO $ 609,280 $ 609,280 Sales revenue Cost of goods sold: Beginning inventory Purchases $ 29,500 $ 29,500 255,440 255,440 284,940 284,940 Goods available for sale Ending inventory Cost of goods sold 2. Compute the difference between the pretax income and the ending inventory amount for the two cases. Comparison of Amounts Case A Case B FIFO LIFO Difference Pretax income Ending inventory
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