The management of Blossom 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 (13,500 units) $54,000
Cost of 123,000 units purchased 541,900
Selling price of 101,000 units sold 773,000
Operating expenses 126,500
Units purchased consisted of 37,000 units at $4.20 on May 10, 59,000 units at $4.40 on August 15, and 27,000 units at $4.70 on November 20. Income taxes are 30%.
(a) Prepare comparative condensed income statements for 2025 under FIFO and LIFO.
