The Cecil-Booker Vending Company changed its method of valuing inventory from the average cost method to the FIFO cost method at the beginning of 2021. At December 31, 2020, inventories were $121,000 (average cost basis) and were $125,000 a year earlier. Cecil-Booker’s accountants determined that the inventories would
The Cecil-Booker Vending Company changed its method of valuing inventory from the average cost method to the FIFO cost method at the beginning of 2021. At December 31, 2020, inventories were $121,000 (average cost basis) and were $125,000 a year earlier. Cecil-Booker’s accountants determined that the inventories would have totaled $157,000 at December 31, 2020, and $162,000 at December 31, 2019, if determined on a FIFO basis. A tax rate of 25% is in effect for all years.
One hundred thousand common shares were outstanding each year. Income from continuing operations was $410,000 in 2020 and $535,000 in 2021. There were no discontinued operations either year.
Required:
1. Prepare the
2. Prepare the 2021–2020 comparative income statements beginning with income from continuing operations (adjusted for any revisions). Include per share amounts.
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