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Volata Company began operations on January 1, 2019. In the second quarter of 2020, 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: Sales Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (25%) Net income Cost of goods sold (FIFO) 1stQ $ 34,000 6,400 4,400 $ 23,200 5,800 $ 17,400 Net income Net income per common share 2ndQ $36,000 7,400 4,600 $ 24,000 6,000 $ 18,000 2019 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: 2019 $18,000 $18.00 Three Months Ended June 30 2020 $21,100 $ 20.10 2019 3rdQ $ 38,000 8,200 5,000 $ 24,800 6,200 $ 18,600 1stQ 2ndQ 3rdQ 4thQ $6,200 $7,000 $7,600 $8,400 Answer is not complete. 4thQ $ 40,000 9,400 5,400 $ 25,200 6,300 $ 18,900 Sales for the second quarter of 2020 are $44,000, cost of goods sold under the FIFO method is $11,400, and operating expenses are $5,800. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2020. (Round "Earnings per share" answers to 2 decimal places.) 2020 1stQ $ 42,000 10,900 5,600 $ 25,500 6,375 $ 19, 125 Six Months Ended June 30 2019 2020 2020 1stQ $9,800

Volata Company began operations on January 1, 2019. In the second quarter of 2020, 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: Sales Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (25%) Net income Cost of goods sold (FIFO) 1stQ $ 34,000 6,400 4,400 $ 23,200 5,800 $ 17,400 Net income Net income per common share 2ndQ $36,000 7,400 4,600 $ 24,000 6,000 $ 18,000 2019 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: 2019 $18,000 $18.00 Three Months Ended June 30 2020 $21,100 $ 20.10 2019 3rdQ $ 38,000 8,200 5,000 $ 24,800 6,200 $ 18,600 1stQ 2ndQ 3rdQ 4thQ $6,200 $7,000 $7,600 $8,400 Answer is not complete. 4thQ $ 40,000 9,400 5,400 $ 25,200 6,300 $ 18,900 Sales for the second quarter of 2020 are $44,000, cost of goods sold under the FIFO method is $11,400, and operating expenses are $5,800. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2020. (Round "Earnings per share" answers to 2 decimal places.) 2020 1stQ $ 42,000 10,900 5,600 $ 25,500 6,375 $ 19, 125 Six Months Ended June 30 2019 2020 2020 1stQ $9,800

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
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Volata Company began operations on January 1, 2019. In the second quarter of 2020, 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: Sales Cost of goods sold (LIFO) Operating expenses. Income before income taxes. Income taxes (25%) Net income Cost of goods sold (FIFO) 1stQ $ 34,000 6,400 4,400 $ 23, 200 5,800 $ 17,400 2ndQ $36,000 Net income Net income per common share 7,400 4,600 $ 24,000 6,000 $ 18,000 2019 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: 2019 Three Months Ended June 30 2019 2020 $18,000 $21,100 X $18.00 $20.10 3rdQ $ 38,000 8,200 5,000 $ 24,800 6,200 $ 18,600 1stQ 2ndQ 3rdQ $6,200 $7,000 $7,600 Answer is not complete. 4thQ $ 40,000 9,400 5,400 $ 25,200 6,300 $ 18,900 Sales for the second quarter of 2020 are $44,000, cost of goods sold under the FIFO method is $11,400, and operating expenses are $5,800. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. Six Months Ended June 30 2019 2020 2020 1stQ $ 42,000 10,900 5,600 $ 25,500 6,375 $ 19, 125 4thQ $8,400 Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2020. (Round "Earnings per share" answers to 2 decimal places.) 2020 1stQ $9,800
Transcribed Image Text:Volata Company began operations on January 1, 2019. In the second quarter of 2020, 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: Sales Cost of goods sold (LIFO) Operating expenses. Income before income taxes. Income taxes (25%) Net income Cost of goods sold (FIFO) 1stQ $ 34,000 6,400 4,400 $ 23, 200 5,800 $ 17,400 2ndQ $36,000 Net income Net income per common share 7,400 4,600 $ 24,000 6,000 $ 18,000 2019 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: 2019 Three Months Ended June 30 2019 2020 $18,000 $21,100 X $18.00 $20.10 3rdQ $ 38,000 8,200 5,000 $ 24,800 6,200 $ 18,600 1stQ 2ndQ 3rdQ $6,200 $7,000 $7,600 Answer is not complete. 4thQ $ 40,000 9,400 5,400 $ 25,200 6,300 $ 18,900 Sales for the second quarter of 2020 are $44,000, cost of goods sold under the FIFO method is $11,400, and operating expenses are $5,800. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. Six Months Ended June 30 2019 2020 2020 1stQ $ 42,000 10,900 5,600 $ 25,500 6,375 $ 19, 125 4thQ $8,400 Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2020. (Round "Earnings per share" answers to 2 decimal places.) 2020 1stQ $9,800
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