The following information applies to the questions displayed below Jaffa Company prepared its annual financial...
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The following information applies to the questions displayed below Jaffa Company prepared its annual financial statements dated December 31 of the current year. The company applies the FIFO inventory costing method; however, the company neglected to apply LCM to the ending inventory. The prelim inary current year income statement follows: Sales revenue $281,000 Cost of goods sold Beginning inventory Purchases Goods available for sale Ending inventory (FIFO cost) Cost of goods sold $ 33.100 185,000 218,100 48,144 169,956 111,044 62,100 48,944 17130 $ 31,814 Gross profit Operating expenses Pretax income Income tax expense (35%) Net income Assume that you have been asked to restate the current year financial statements to incorporate LCM. You have developed the following data relating to the current year ending inventory Net Realizable Value Quantity 3,060 1,510 7110 3,210 Item $ 3.1 5.1 1.6 6.1 9,486 7,701 11,376 19,581 $48,144 $4.1 3.6 3.6
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