question archive City Copy Center sells laser printers and supplies
City Copy Center sells laser printers and supplies
Subject:AccountingPrice:2.89 Bought3
City Copy Center sells laser printers and supplies. Assume City Copy Center started the year with 100 containers of ink (average cost of $8.30 each, FIFO cost of $8.40 each, LIFO cost of $8.10 each). During the year, City Copy Center purchased 700 containers of ink at $9.90 and sold 600 units for $19.50 each. City Copy Center paid operating expenses throughout the year, a total of $3,750. Ignore income taxes for this exercise.
Prepare City Copy Center’s income statement for the current year ended December 31 under the average, FIFO, and LIFO inventory costing methods. Include a complete statement heading.
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City Copy Center |
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Income Statement |
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Year Ended December 31 |
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Average |
FIFO |
LIFO |
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Sales revenue (600 × $19.50) |
$11,700 |
$11,700 |
$11,700 |
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Cost of goods sold (600 × $9.70*) |
5,820 |
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(100 × $8.40) + (500 × $9.90) |
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5,790 |
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(600 × $9.90) |
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5,940 |
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Gross profit |
5,880 |
5,910 |
5,760 |
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Operating expenses |
3,750 |
3,750 |
3,750 |
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Net income |
$ 2,130 |
$ 2,160 |
$ 2,010 |
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*Average cost per unit: |
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Beginning inventory (100 @ $8.30)........................................................ |
$ 830 |
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Purchases (700 @ $9.90)......................................................................... |
6,930 |
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Cost of goods available........................................................................... |
$7,760 |
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Average cost per unit $7,760 / 800 units........................................... |
$ 9.70 |
