Preparation of condensed income statement by valuation of

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Preparation of condensed income statement by valuation of inventories with LIFO and FIFO method.

 (FIFO and LIFO; Income Statement Presentation) The board of directors of Ichiro Corporation is considering whether or not it should instruct the accounting department to shift from a first-in, first-out (FIFO) basis of pricing inventories to a last-in, first-out (LIFO) basis. The following information is available.

Sales

 21,000 units @ $50

Inventory, January 1

  6,000 units @  20

Purchases

  6,000 units @  22

 

10,000 units @  25

 

  7,000 units @  30

Inventory, December 31

  8,000 Units @   ?

Operating expenses

$200,000

Instructions                                                   

Prepare a condensed income statement for the year on both bases for comparative purposes.

Reference no: EM13356567

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