Presented below are income statements prepared on a LIFO and FIFO basis for Sand

Question

Presented below are income statements prepared on a LIFO and FIFO basis for Sandhill Company, which started operations on January 1, 2016. The company presently uses the LIFO method of pricing its inventory and has decided to switch to the FIFO method in 2017. The FIFO income statement is computed in accordance with the requirements of GAAP. Sandhill's profit-sharing agreement with its employees indicates that the company will pay employees 10% of income before profit- sharing. Income taxes are ignored LIFO Basis FIFO Basis 2016 2016 $2,910 $2,910 $2,910 $2,910 990 1,050 870 82 $657 $738 $724$788 2017 2017 Sales Cost of goods sold Operating expenses Income before profit-sharing Profit-sharing expense Net income 1,130 1,050 730 73 1,040 1,050 820 82 1,050 1,050 810 86 Answer the following questions If comparative income statements are prepared, what net income should Sandhill report in 2016 and 2017? (Round answers to 0 decimal places, e.g. 125.) 2017 2016 Net income ?

Explanation / Answer

  

Retained Earnings Statement

2017 2016 Net income 724 783

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