Cambi Company began operations on January 1, 2016. In the second quarter of 2017

Question

Cambi Company began operations on January 1, 2016. In the second quarter of 2017, it adopted the FIFO method of inventory valuation. In the past, it used the LIFO method. The company's interim income statements as originally reported under the LIFO method follow: 2016 2017 1stQ 1stQ 2ndQ 3rdQ 4thQ Sales Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (40%) 24,00026,000 28,000 $30,00032,000 9,900 4,600 15,200 16,000 16,800 17,200 17,500 7,800 $ 9,120 $9,600 10,080 $10,32010,500 5,400 3,400 6,400 3,600 7,200 4,000 8,400 4,400 6,080 6,400 6,720 6,880 Net income If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows: 2016 2017 1stQ $5,200 6,000 6,6007,4008,800 1stQ 2ndQ 3rdQ 4thQ Cost of goods sold (FIFO) Sales for the second quarter of 2017 are $34,000, cost of goods sold under the FIFO method is $10,400, and operating expenses are $4,800. The effective tax rate remains 40 percent. Cambi Company has 1,000 shares of common stock outstanding Prepare a schedule showing the calculation of net income and earnings per share that Cambi reports for the three-month period and the six-month period ended June 30, 2017. (Round "Earnings per share" answers to 2 decimal places.)

Explanation / Answer

Final Solution:

2016 Q1 Q2 Q3 Q4 Total Income Before Income and Tax           15,200.00 16,000.00 16,800.00 17,200.00 65,200.00 Taxes             6,080.00     6,400.00     6,720.00     6,880.00 26,080.00 Net Income 39,120.00 Tax Rate                     0.40             0.40             0.40             0.40

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