S6-2 (similar to Question Help Wilson Copy Center sells laser printers and suppl
ID: 2606345 • Letter: S
Question
S6-2 (similar to Question Help Wilson Copy Center sells laser printers and supplies. Assume Wilson Copy Center started the year with 100 containers of ink (average cost of S9.10 each, FIFO cost of S8.60 each, LIFO cost of S8.00 eachi. During the year, Wilson Copy Center purchased 800 containers of ink at $10.00 and sold 600 units for $21.75 each. Wilson Copy Center paid operating expenses throughout the year, a total of S3,900. Ignore income taxes for this exercise. Prepare Wilson Copy Centers income statement for the current year ended December 31 under the average, FIFO, and LIFO inventory costing methods. Include a complete statement heading Complete the income statement by selecting the appropriate heading and income statement labels, and then calculating the amcunts for each of the three required inventory methods (Calculate unit costs to the nearest cent. Round all other calculations to the nearest whole dollar)Explanation / Answer
Answer:
Income statement for the year ended decmber-31
Wilson copy Center
Income statement
Method
Particular
Average
FIFO
LIFO
Sales Revenue
=600*21.75
13050
13050
13050
less:
Cost of goods sold
as per weighted average
5940
as per FIFO
5860
as per LIFO
6000
Gross profit
7110
7190
7050
less:
Operating expanses
3900
3900
3900
Net income
3210
3290
3150
Working notes for the above answer:
1
Calculation of cost of goods sold as per Average
Weighted average
Unit
price
total
Opening
100
9.1
910
Purchased
800
10
8000
Total
900
9.9
8910
Less: Sales
Total sales
600
9.9
5940
Closing stock
300
9.9
2970
2
Calculation of cost of goods sold as per FIFO
FIFO
Unit
price
total
Opening
100
8.6
860
Purchased
800
10
8000
Total
900
8860
Less: Sales
From opening inventory
100
8.6
860
From purchases inventory
500
10
5000
Total sales
600
5860
Closing stock
300
3000
3
Calculation of cost of goods sold as per LIFO
LIFO
Unit
price
total
Opening
100
8
800
Purchased
800
10
8000
Total
900
8800
Less: Sales
From opening inventory
0
0
From purchases inventory
600
10
6000
Total sales
600
6000
Closing stock
300
2800
Wilson copy Center
Income statement
Method
Particular
Average
FIFO
LIFO
Sales Revenue
=600*21.75
13050
13050
13050
less:
Cost of goods sold
as per weighted average
5940
as per FIFO
5860
as per LIFO
6000
Gross profit
7110
7190
7050
less:
Operating expanses
3900
3900
3900
Net income
3210
3290
3150
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.