E7-7 (Algo) Analyzing and Interpreting the Financial Statement Effects of LIFO and FIFO LO7-2, 7-3[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 thecurrent year, the accounting records provided the following information for product 2:UnitUnitsCostInventory, December 31, prior yearFor the current year:Purchase, April 11Purchase, June 1Sales ($56 each)Operating expenses (excluding income tax expense)2,990$138,9707,94010,8501419$192,500E7-7 Part 22. Compute the difference between the pretax income and the ending inventory amount for the two cases.Comparison of AmountsCase ACase BFIFOLIFODifferencePretax income$266,190$223,500 $42,690Ending inventory8,758$9,516 $

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Description: E7-7 (Algo) Analyzing and Interpreting the Financial Statement Effects of LIFO and FIFO LO7-2, 7-3[The following information applies to the questions displayed below.]Emily Company uses a periodic inventory system. At the end of the annual accountin

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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: Unit Cost $13 Units Inventory, December 31, prior year For the current year: Purchase, April 11 Purchase, June 1 Sales ($56 each) Operating expenses (excluding income tax expense) 2,990 8,970 7,940 10,850 14 19 $192,500 E7-7 Part 2 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 266,190 $ 223,500 $ 42,690 Ending inventory 8,758 2$ 9,516

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: Unit Cost $13 Units Inventory, December 31, prior year For the current year: Purchase, April 11 Purchase, June 1 Sales ($56 each) Operating expenses (excluding income tax expense) 2,990 8,970 7,940 10,850 14 19 $192,500 E7-7 Part 2 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 266,190 $ 223,500 $ 42,690 Ending inventory 8,758 2$ 9,516

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 5MC: The moving average inventory cost flow assumption is applicable to which of the following inventory...

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