Brian Burns uses perpetual inventory system and LIFOAll credit sales discounts are recorded using the net method – customers receive a 3 percent discount if they pay within 30 days.Purchase discounts are recorded using the net methodAll depreciation is straight line. Additional Information for Journal Entries Brian Burns records accruals for utilities expense as an adjusting journal entry at the end of each year. They pay utilities once a year on January 31st for the prior year. NOTE: There is no payment for utilities on January 31st of 2022 because January 1 of 2022 is the first day of operations. January 1 Sold 10,000 shares of common stock for $95 per share. Borrowed $2,000,000 at 8 percent with interest payable semi-annually (on July 1 and January 1). Purchased 1,000 units of inventory at $150 a piece on credit from Biggie Smalls Inc. Terms are 2/10; n/60 Paid $480,000 for 2 years of rent in advance Purchased office supplies costing $10,000 with cash Jan 20 Paid Biggie full amount owed Feb 10 Sold 100 units inventory with a list price of $22,000 to M Jagger on credit. Sold 140 units of inventory for cash of $30,000. March 15 Bought 1,000 units of inventory at $170 a piece from Wolfpack Corporation with cash April 30 Sold 150 units of inventory for cash of $30,000 June 30 Purchased land and a building. A $200,000 cash down payment was required and a $800,000 note was accepted by the seller for the balance (12 percent interest payable each year on June 30). The fair value of the land at the date of purchase was deemed to be 300,000 and the fair value of the building was 900,000. The building has an estimated residual value of $0 and a useful life of 30 years. September 1 Brian Burns began subleasing extra space to DJ Moore. DJ Moore paid for $60,000 for six months’ in advance. October 1 Purchased equipment for in exchange for a $30,000 non-interest bearing note due in one year. The equipment has an estimated residual value of $2,000 and a useful life of 8 years. Note: Assume an effective interest rate of 8 percent. October 1 Purchased one year of insurance in advance for $12,000 October 14 Sold 400 units of inventory to H Gilmore for $100,000 on credit October 30 H Gilmore paid half of the amount owed Dec 1 Repurchased 1,000 shares of stock for $120/share Dec 15 Declared a dividend of $2/share. The dividend will be distributed to shareholders on January 19, 2022. Dec 15 H Gilmore went bankrupt so Brian Burns wrote off the balance owed by H Gilmore as uncollectible (hint: Directly write-off this Account since no allowance has been made yet). Dec 20 Purchased office supplies for $13,000 in cash. Dec 25 Sold 150 units of inventory to J Lennon for $30,000 on Credit Dec 31 Sold 1,000 units Inventory for $200,000 in Cash Information for Adjusting Entries as of 12/31/2022 A count of office supplies revealed $12,000 in office supplies as of 12/31/2022 Receive the 2022 utility bill for $25,000, payable on January 31st 2022. All depreciation is straight line. Brian Burns uses the balance sheet method for estimating bad debts and estimates that 5 percent of outstanding A/R at year-end will be uncollectible. The income tax rate for 2022 is 21%. How would you put these dollar amounts in the statement of operations for the year ended December 31, 2022? AВCBrian Burns Co.Statement of OperationsFor the year ended December 31, 2022Net SalesCOGSGross ProfitOperating ExpensesO Bad Debt Expense1 Rent Expense2 Supplies Expense3 Depreciation Expense4 Utilities Expense5 Insurance Expense6 Total Operating Expenses17 Operating Income1819 Other Items20 Interest Expense21 Rent Revenue2223 Pretax Income24 Income Tax Benefit25 Net Income26Earnings Per Share (9,000 Shares27 Outstanding)2829303132

Question

Brian Burns uses perpetual inventory system and LIFOAll credit sales discounts are recorded using the net method – customers receive a 3 percent discount if they pay within 30 days.Purchase discounts are recorded using the net methodAll depreciation is straight line. Additional Information for Journal Entries Brian Burns records accruals for utilities expense as an adjusting journal entry at the end of each year. They pay utilities once a year on January 31st for the prior year. NOTE: There is no payment for utilities on January 31st of 2022 because January 1 of 2022 is the first day of operations.   January 1          Sold 10,000 shares of common stock for $95 per share.                                                   Borrowed $2,000,000 at 8 percent with interest payable semi-annually (on July 1 and January 1). Purchased 1,000 units of inventory at $150 a piece on credit from Biggie Smalls Inc. Terms are 2/10; n/60 Paid $480,000 for 2 years of rent in advance Purchased office supplies costing $10,000 with cash Jan 20                Paid Biggie full amount owed Feb 10               Sold 100 units inventory with a list price of $22,000 to M Jagger on credit.                           Sold 140 units of inventory for cash of $30,000.                         March 15          Bought 1,000 units of inventory at $170 a piece from Wolfpack Corporation with cash April 30            Sold 150 units of inventory for cash of $30,000 June 30             Purchased land and a building.  A $200,000 cash down payment was required and a $800,000 note was accepted by the seller for the balance (12 percent interest payable each year on June 30). The fair value of the land at the date of purchase was deemed to be 300,000 and the fair value of the building was 900,000. The building has an estimated residual value of $0 and a useful life of 30 years. September 1      Brian Burns began subleasing extra space to DJ Moore. DJ Moore paid for $60,000 for six months’ in advance. October 1          Purchased equipment for in exchange for a $30,000 non-interest bearing note due in one year. The equipment has an estimated residual value of $2,000 and a useful life of 8 years. Note: Assume an effective interest rate of 8 percent. October 1          Purchased one year of insurance in advance for $12,000 October 14        Sold 400 units of inventory to H Gilmore for $100,000 on credit October 30        H Gilmore paid half of the amount owed Dec 1                Repurchased 1,000 shares of stock for $120/share Dec 15              Declared a dividend of $2/share. The dividend will be distributed to shareholders on January 19, 2022.  Dec 15              H Gilmore went bankrupt so Brian Burns wrote off the balance owed by H Gilmore as uncollectible (hint: Directly write-off this Account since no allowance has been made yet). Dec 20              Purchased office supplies for $13,000 in cash. Dec 25              Sold 150 units of inventory to J Lennon for $30,000 on Credit Dec 31              Sold 1,000 units Inventory for $200,000 in Cash  Information for Adjusting Entries as of 12/31/2022 A count of office supplies revealed $12,000 in office supplies as of 12/31/2022 Receive the 2022 utility bill for $25,000, payable on January 31st 2022. All depreciation is straight line. Brian Burns uses the balance sheet method for estimating bad debts and estimates that 5 percent of outstanding A/R at year-end will be uncollectible. The income tax rate for 2022 is 21%. How would you put these dollar amounts in the statement of operations for the year ended December 31, 2022? AВCBrian Burns Co.Statement of OperationsFor the year ended December 31, 2022Net SalesCOGSGross ProfitOperating ExpensesO Bad Debt Expense1 Rent Expense2 Supplies Expense3 Depreciation Expense4 Utilities Expense5 Insurance Expense6 Total Operating Expenses17 Operating Income1819 Other Items20 Interest Expense21 Rent Revenue2223 Pretax Income24 Income Tax Benefit25 Net Income26Earnings Per Share (9,000 Shares27 Outstanding)2829303132

Accepted Answer

The word "First-In, First-Out" is "First-In, First-Out." It's a method for calculating the cost of…