Question

Broadhead 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:

			Units			Unit Cost
Inventory, December 31, prior year				2,840			$	13
For the current year:
Purchase, April 11				9,000				11
Purchase, June 1				7,830				16
Sales ($52 each)				10,820
Operating expenses (excluding income tax expense)	$	188,000

3.

value:
1.00 points

Required information

Required:

1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO.

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4.

value:
1.00 points

Required information

2. Compute the difference between the pretax income and the ending inventory amount for the two cases.

Answer 1