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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 statement. 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) 2ndQ $ 28,000 6,600 3,800 $ 17,600 4,400 $ 12,600 $ 13,200 1stQ $ 26,000 Net income Net income per common share 5,600 3,600 $ 16,800 4, 200 2019 2ndQ 1stQ $5,400 $ 6,200 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: Three Months Ended June 30 2020 3rdQ $ 30,000 7,400 4,200 $ 18,400 4,600 4thQ $ 32,000 8,600 4,600 $ 18,800 4,700 $ 13,800 $ 14,100 2019 4thQ 3rdQ $ 6,800 $ 7,600 2020 1stQ $ 34,000 10,100 4,800 Sales for the second quarter of 2020 are $36,000, cost of goods sold under the FIFO method is $10,600, and operating expenses are $5,000. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. $ 19, 100 4,775 $ 14,325 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.) Six Months Ended June 30 2019 2020 2020 1stQ $9,000

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 statement. 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) 2ndQ $ 28,000 6,600 3,800 $ 17,600 4,400 $ 12,600 $ 13,200 1stQ $ 26,000 Net income Net income per common share 5,600 3,600 $ 16,800 4, 200 2019 2ndQ 1stQ $5,400 $ 6,200 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: Three Months Ended June 30 2020 3rdQ $ 30,000 7,400 4,200 $ 18,400 4,600 4thQ $ 32,000 8,600 4,600 $ 18,800 4,700 $ 13,800 $ 14,100 2019 4thQ 3rdQ $ 6,800 $ 7,600 2020 1stQ $ 34,000 10,100 4,800 Sales for the second quarter of 2020 are $36,000, cost of goods sold under the FIFO method is $10,600, and operating expenses are $5,000. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. $ 19, 100 4,775 $ 14,325 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.) Six Months Ended June 30 2019 2020 2020 1stQ $9,000

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 $ 26,000 5,600 3,600 $ 16,800 4, 200 $ 12,600 Net income Net income per common share 2ndQ $ 28,000 6,600 3,800 $ 17,600 4,400 $ 13,200 2ndQ 1stQ $5,400 $ 6,200 2019 Three Months Ended June 30 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 2020 3rdQ $ 30,000 7,400 4, 200 $ 18,400 4,600 $ 13,800 2019 4thQ $ 32,000 Sales for the second quarter of 2020 are $36,000, cost of goods sold under the FIFO method is $10,600, and operating expenses are $5,000. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. 2019 8,600 4,600 $ 18,800 4,700 $ 14,100 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 $ 34,000 Six Months Ended June 30 2020 10,100 4,800 $ 19,100 4,775 $ 14,325 2020 3rdQ 4thQ 1stQ $ 6,800 $ 7,600 $ 9,000
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 $ 26,000 5,600 3,600 $ 16,800 4, 200 $ 12,600 Net income Net income per common share 2ndQ $ 28,000 6,600 3,800 $ 17,600 4,400 $ 13,200 2ndQ 1stQ $5,400 $ 6,200 2019 Three Months Ended June 30 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 2020 3rdQ $ 30,000 7,400 4, 200 $ 18,400 4,600 $ 13,800 2019 4thQ $ 32,000 Sales for the second quarter of 2020 are $36,000, cost of goods sold under the FIFO method is $10,600, and operating expenses are $5,000. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. 2019 8,600 4,600 $ 18,800 4,700 $ 14,100 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 $ 34,000 Six Months Ended June 30 2020 10,100 4,800 $ 19,100 4,775 $ 14,325 2020 3rdQ 4thQ 1stQ $ 6,800 $ 7,600 $ 9,000
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