Question

value: 10.00 points Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company used the FIFO inventory costing method, but it failed to apply LCM to the ending inventory. The preliminary income statement follows: Sales Revenue Cost of Goods Sold $144,000 S16,000 93,000 Beginning Inventory Goods Available for Sale Ending Inventory (FIFO cost) 109,000 24,580 Cost of Goods Sold 84,420 Gross Profit 59,580 32,000 27,580 8,274 Income from Operations Income Tax Expense (30%) Net Income S 19,306 Assume that you have been asked to restate the financial statements to incorporate LCM. You have developed the following data relating to the ending inventory: Market Value per Unit Purchase Cost item Quantity Per Unit ota 750 3,700 1,600 1,600 $3.20 5,120 4.20 2.20 1.10 3.20 4.00 2.20 5.20 3,000 8,140 8,320 $24,580

 



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