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Jonah Copy Center sells laser printers and supplies. Assume Jonah Copy Center st

ID: 2529696 • Letter: J

Question

Jonah Copy Center sells laser printers and supplies. Assume Jonah Copy Center started the year with 100 containers of ink (average cost of $9.10 each, FIFO cost of $8.40 each, LIFO cost of $7.90 each). During the year, Jonah copy center purchased 800 containers of ink at $10.00 and sold 570 units of $20.00 each. Jonah copy center paid operating expenses throughout the year, a total of $3,900. Ignore Income taxes for this excercise.

Prepare Jonah 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.

Complete the income statement by selecting the appropriate heading and income statement labels Jonah Copy Center Income Statement Year Ended December 31 FIFO LIFO Average Cost 11400 L 11400 11400 Sales revenue Cost of goods sold Gross profit Operating expenses Net income

Explanation / Answer

FIFO Method Cost of Goods Available for Sale Explanation Units Unit Cost Total Cost Op. Inventory            100              8.40           840.00 Purchases            800            10.00       8,000.00            900       8,840.00 Ending Inventory = 900 Units - 570 Units = 330 Units Ending Inventory Explanation Units Unit Cost Total Cost Purchases            330            10.00       3,300.00            330       3,300.00 Cost of Goods Available      8,840.00 Ending Inventory      3,300.00 Cost of Goods Sold      5,540.00 LIFO Method Cost of Goods Available for Sale Explanation Units Unit Cost Total Cost Op. Inventory            100              7.00           700.00 Purchases            800            10.00       8,000.00            900       8,700.00 Ending Inventory = 900 Units - 570 Units = 330 Units Ending Inventory Explanation Units Unit Cost Total Cost Op. Inventory            100              7.00           700.00 Purchases            230            10.00       2,300.00            330       3,000.00 Cost of Goods Available      8,700.00 Ending Inventory      3,000.00 Cost of Goods Sold      5,700.00 Average Cost Method Cost of Goods Available for Sale Explanation Units Unit Cost Total Cost Op. Inventory            100              9.10           910.00 Purchases            800            10.00       8,000.00            900       8,910.00 Ending Inventory = 900 Units - 570 Units = 330 Units Average Cost per Unit = $8,910 / 900 Units = $9.90 per Unit Ending Inventory = 330 Units X $9.90 = $3,267 Cost of Goods Available      8,910.00 Ending Inventory      3,267.00 Cost of Goods Sold      5,643.00 Jordan Copy Center Income Statement Average Cost FIFO LIFO Sales Revenue    11,400.00     11,400.00    11,400.00 Cost of Goods Sold      5,643.00       5,540.00      5,700.00 Gross Margin      5,757.00       5,860.00      5,700.00 Operating Expense      3,900.00       3,900.00      3,900.00 Net Income      1,857.00       1,960.00      1,800.00