Volata Company began operations on January 1, 2023. In the second quarter of 2024, it adopted the FIFO method ofinventory valuation. In the past, it used the LIFO method. The company's interim income statements as originallyreported under the LIFO method follow:AccountsSalesCost of goods sold (LIFO)Operating expensesIncome before income taxesIncome taxes (25%)Net incomeAccountsCost of goods sold (FIFO)If the FIFO method had been used since the company began operations, cost of goods sold in each of the previousquarters would have been as follows:20232024$ 36,000$ 38,000$ 40,000$ 42,0001st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter$ 34,0006,4004,4007,4004,6009,4005,4008,2005,000$ 24,8006,200$ 23,2005,800$ 25,2006,30010,9005,600$ 25,5006,375$19, 125$ 17,400$ 18,600$ 18,900Net incomeEarnings per share$ 24,0006,000$ 18,000Sales for the second quarter of 2024 are $44,000, cost of goods sold under the FIFO method is $11,400, and operatingexpenses are $5,800. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stockoutstanding.202320241st Quarter 2nd Quarter 3rd Quarter4th Quarter 1st Quarter$ 6,200 $ 7,000 $ 7,600 $ 8,400 $ 9,800Required: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, 2023 2024.Note: Round "Earnings per share" answers to 2 decimal places.2023Three Months Ended June Six Months Ended June3030202420232024

The amount that remains after expenses, benefits, and taxes are subtracted from the earnings of a…

Volata Company began operations on January 1, 2023. In the second quarter of 2024, 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: Accounts Sales Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (25%) Net income Accounts Cost of goods sold (FIF0) 2023 2024 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter $ 34,000 $36,000 $ 38,000 $ 40,000 $ 42,000 8,200 5,000 $ 24,800 6,200 9,400 5,400 $ 25,200 6,300 10,900 5,600 $ 25,500 6,375 $ 18,600 $ 18,900 $ 19,125 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: 6,400 4,400 $ 23,200 5,800 $ 17,400 Net income Earnings per share 7,400 4,600 $ 24,000 6,000 $ 18,000 Sales for the second quarter of 2024 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. 2023 2023 2024 1st Quarter 2nd Quarter3rd Quarter4th Quarter1st Quarter $ 6,200 $ 7,000 $ 7,600 $ 8,400 $ 9,800 Required: 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, 2023 and 2024. Note: Round "Earnings per share" answers to 2 decimal places. Three Months Ended June Six Months Ended June 30 30 2024 2023 2024

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 8E: Cost of Goods Sold, Income Statement. and Statement of Comprehensive Income Gaskin Company derives...