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question qp corp sold 5 300 units of its product at 47 00 per unit in year 2017 and 4291671

Question

QP Corp. sold 5,300 units of its product at $47.00 per unit in year 2017 and incurred operating expenses of $8.00 per unit in selling the units. It began the year with 800 units in inventory and made successive purchases of its product as follows.

Required:

1. Prepare comparative income statements for the three inventory costing methods of FIFO, LIFO, and weighted average which includes a detailed cost of goods sold section as part of each statement. The company uses a periodic inventory system, and its income tax rate is 40%. (Round your average cost per unit to 2 decimal places.)

QP CORP

INCOME STATEMENTS COMPARING FIFO, LIFO, AND WEIGHTED AVERAGE

FOR YEAR ENDED DECEMBER 31, 2017

FIFO

LIFO

WEIGHTED AVERAGE

SALES

$249,100

$249,100

$249,100

COST OF GOODS SOLD:

      INVENTORY DEC. 31, 2016

      COST OF PURCHAES

      COST OF GOODS AVAILABLE FOR SALE

       LESS: INVENTORY DEC. 31, 2017

              COST OF GOODS SOLD

GROSS PROFIT

OPERATING EXPENSE

$42,400

$42,400

$42,400

INCOME BEFORE TAXES

INCOME TAXES EXPENSE

NET INCOME

Jan.

1

Beginning inventory

800

units @ $20.00 per unit

Feb.

20

Purchase

1,700

units @ $21.00 per unit

May

16

Purchase

900

units @ $22.00 per unit

Oct.

3

Purchase

600

units @ $23.00 per unit

Dec.

11

Purchase

3,500

units @ $24.00 per unit

 

 

Total

7,500

units

 

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